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Taiwan signals chip makers to comply with US export rules aimed at Chinese semiconductor industry

Taiwanese semiconductor companies attach “great importance” to complying with the law, the island’s government said on Saturday, signaling that they will comply with new US export control regulations that aim to slow down chip production in China.

The rules, announced Friday by the administration of President Joe Biden, include a measure to cut China off from certain chips produced anywhere in the world on American hardware, greatly expanding its options in its bid to slow down Beijing’s technological and military progress.

Taiwan, a major chip manufacturer, is home to the Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chip manufacturer and a major supplier to companies including Apple.

In response to the US announcement, Taiwan’s Ministry of Economic Affairs said that Taiwanese firms were operating in a law-abiding manner.

“Taiwan’s semiconductor industry has a long history of serving customers around the world and attaches great importance to complying with laws,” the statement said.

“In addition to complying with domestic laws and regulations, it will also cooperate with the needs of international customers who place orders and the regulations of customers in their countries.”

Taiwan’s semiconductor industry is a technological leader and continues to “maintain an edge in competition for international orders,” the ministry said in a statement.

The government continues to maintain close contact with manufacturers and supports them in investing in the expansion of factories and supplying products to the world for technological development, the ministry said in a statement.

TSMC declined to comment on the US rules, saying there was a quiet period ahead of next week’s quarterly earnings release. Smaller competitor United Microelectronics also declined to comment ahead of its earnings report later this month.

Taiwan has its own concerns about China, especially Chinese companies’ attempts to poach talent and technical know-how. The government severely restricts Taiwanese chip investment in China, the island’s largest trading partner.

Taiwan’s concerns have intensified as China conducts regular military exercises near the island in an attempt to force it to recognize Beijing’s sovereignty.

The United States is Taiwan’s most important international supporter and arms supplier, despite the lack of official diplomatic relations.

Taiwan’s Economy Minister Wang Mei-hua will visit the US next week to respond to what her office called “concerns” about supply chains and geopolitical issues. She will visit US technology firms, which are major customers for Taiwanese semiconductor companies.

© Thomson Reuters 2022

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