Taiwanese tech firms to throttle China business over cyber threats, security concerns

Officials announced on Friday that Taiwan is imposing fresh restrictions on exports of domestically developed technology to several leading Chinese firms, citing national security concerns.

In Taipei, Vice President Hsiao Bi‑khim acknowledged that talks between state authorities and private-sector players had been tough, as mentioned in a Bloomberg report.

When asked about the blacklist of Chinese chip makers, she said, “This has been a very challenging conversation between governments and private businesses,” and added, “But we have generally aligned in understanding that ultimately, export control is to ensure that technology innovated, developed, and produced in Taiwan, is not used to compromise our security or to harm the safety and security of the Taiwanese people.”

She noted Taiwan will coordinate with foreign partners to defend values central to its society. Government sources have stressed these measures form part of ongoing trade negotiations with the United States.

In June, Taipei added Huawei Technologies Co. and its fabrication partner SMIC to its restricted‑entities list. Officials said the move aims to stop weapons from spreading and reduce other security threats.

Under the updated regulations, local suppliers must obtain government authorization before engaging with any organization on the strategic high‑tech commodities list.

Earlier this year, Bloomberg reported that a number of Taiwanese vendors were helping Huawei establish chip‑manufacturing sites in southern China, territory Beijing claims and has threatened to seize if peaceful reunification fails.

Chinese cyber threats targeted Taiwan’s chip sector

At the same time, Reuters reported, researchers at Proofpoint cautioned on Wednesday that China‑aligned hacking groups have intensified campaigns to infiltrate Taiwan’s semiconductor sector and the analysts who cover it.

“We’ve seen entities that we hadn’t ever seen being targeted in the past being targeted,” said Mark Kelly, a threat researcher specializing in China‑related cyber operations.

Proofpoint traced at least three separate China‑linked groups running campaigns between March and June, and warned some may still be active.

These attacks happened as the U.S. tightened limits on American‑designed chips going to China, and as China scrambled to replace its shrinking stock of advanced U.S. parts, especially for AI.

Although they declined to name specific victims, the analysts told Reuters that roughly 15–20 organizations, including small local suppliers, banking analysts in the U.S., and large multinationals, had been targeted.

Major Taiwanese foundries such as TSMC, MediaTek, UMC, Nanya Technology, and RealTek were contacted. It remains unknown whether any breaches succeeded.

In May, Taiwan’s AI exports jumped 38.6% year‑on‑year to $51.74 billion. That was the fastest pace in nearly 15 years and the first time exports exceeded $50 billion, the finance ministry said.

Exports rose for the 19th month in a row, beating the 25% increase economists expected and April’s 29.9% rise. Companies like TSMC, the world’s biggest contract chipmaker, supply Nvidia, Apple and other major tech firms.

The ministry said strong AI demand and buyers ordering early to avoid possible U.S. tariffs helped boost May exports.

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