Taiwan Weighs Chip Export Bill With 10-Year Prison Terms for China Sales

Economic Warfare & Trade Policy › Tech & export controls

Taiwan lawmakers will hold a public hearing on Monday, Nov. 2, 2026, on a Taiwan chip export bill that would make it a crime to ship specified advanced chips and chipmaking gear to China without a permit. The Legislative Yuan’s Economics Committee meets from 2 p.m. to 5:30 p.m. Taipei time, or 1 a.m. to 4:30 a.m. EST, according to the legislature’s meeting notice.

Key figures: up to 10 years in prison · fines of NT$5M-NT$10M · only 12 of 10,000+ controlled items now restricted for China · China and Hong Kong took 24.2% of Taiwan’s exports in Jan.-Sep.

What the chip bill would do

The proposal, filed by Democratic Progressive Party legislators Chung Chia-pin and Chiu Chih-wei with 17 party colleagues, adds Articles 13-2 and 27-3 to the Foreign Trade Act. Under it, specified integrated circuits, critical wafer materials, components and manufacturing equipment could not be exported to mainland China without approval. The same rule would cover entities that the Ministry of Economic Affairs lists as controlled by China or as acting for it to evade the rules, and the ministry would publish that list.

Routing goods through a third place, reselling them or using other indirect paths to reach China would draw the same penalty: up to 10 years in prison, with fines of NT$5 million to NT$10 million, Economic Daily News reported. Criminal proceeds would be confiscated. The bill would also raise the maximum penalty for exports to existing controlled regions under Article 27. Its explanatory notes say ICs and related high-tech goods made up more than 70% of Taiwan’s exports in May.

The loophole lawmakers want to close

Chung has argued that a change made under former President Ma Ying-jeou narrowed export restrictions on China to semiconductor manufacturing equipment. Today, more than 10,000 items are on Taiwan’s controlled list but only 12 categories of wafer fabrication equipment are restricted for China, he said in June, according to the Taipei Times. Shipments to “non-controlled regions” carry only administrative fines of up to NT$3 million, or about $94,000.

The push followed a smuggling case. In March, the U.S. Justice Department began proceedings against Supermicro over alleged illegal exports to China of AI servers containing Nvidia chips, and Kaohsiung prosecutors later opened an investigation into three people suspected of falsifying documents to move Supermicro servers to China, the Taipei Times reported. ImportGenius lists 11,866 declared U.S. import shipments for Super Micro Computer Inc. from November 2006 through June 2026, with Taiwan’s Ablecom Technology as its top supplier and Yantian, China, as the top foreign port. Those are declared shipments into the United States and say nothing about exports to China.

Where the government stands

The ministry’s International Trade Administration said it is studying how to expand controls on advanced semiconductors and that it respects the legislators’ proposal, Economic Daily News reported. In July, Economic Affairs Minister Kung Ming-hsin said the ministry would fully review the current limits on chipmaking equipment exports to China, but that broader controls affect industry and need evaluation across agencies.

Liu Meng-chun, who heads the First Research Division at the Chung-Hua Institution for Economic Research, told Economic Daily News that the bill is a declaratory policy tied to a broader strategy with allies. Because chip supply chains are global, he said, enforcement will fall short. TBR has tracked Washington’s side of the issue in our explainer on U.S. chip export controls.

Data: how much Taiwan sells to China

Taiwan’s exports reached $661.6 billion from January through September, up 46.2% from a year earlier, according to the Ministry of Finance. Mainland China and Hong Kong bought $160.1 billion, or 24.2%, second only to the United States at $207.8 billion. Sales to China and Hong Kong grew 28.5%, well behind the 59.3% rise in shipments to the U.S. and the 52.9% gain for Southeast Asia. Information and communication products plus electronic parts made up 79.0% of all exports, by TBR’s calculation from ministry data.

In September alone, exports hit a record $87.22 billion, up 60.9%. Taiwan is also building out chip supply links in the U.S., including a planned $4 billion park in Texas.

Sources

• Legislative Yuan: Economics Committee public hearing notice, Nov. 2, 2026
• Economic Daily News (udn.com): Ministry of Economic Affairs studies tighter controls on chip exports to mainland China (Nov. 2, 2026, in Chinese)
• Taipei Times: China tech export rule gaps need fixing: lawmaker (June 27, 2026)
• Ministry of Finance, R.O.C.: Summary of Exports and Imports for September 2026
• ImportGenius: Super Micro Computer, Inc. U.S. customs shipment records