00:00Taiwan is considering stricter export controls on the sale of AI chips to China.
00:04Why is the government considering this now?
00:06I think at the enforcement level, it will be a major breakthrough to have a ship away from
00:13Taiwan's previous ambiguous posture on the export control vis-a-vis China toward a clear stance on
00:21countering the sentient evasions by imposing actual criminal penalties on AI chip smugglers.
00:29And I think second, it will send a clear signal that Taiwan is willing to share the deterrence
00:34burden with the United States and to help maintain the regional peace and status quo by ensuring that
00:40the most advanced AI chips covered by the U.S. engines are not transferred to China.
00:46Now, how would this impact Taiwanese companies, especially chip giant TSMC?
00:50TSMC's revenue from mainland China has been actually declining from about 20% of the total
01:00sales in 2019 to around 7% in last year.
01:06So I think the overall risk for TSMC is manageable.
01:11But for AI service companies like Foscom, Westrong and others, the risk and the potential losses
01:18could be higher.
01:19But on the other hand, we also have to recognize that China is trying to strengthen its self-reliance
01:26and to reduce its dependency from the external supply chains.
01:32This means that I think in the foreseeable future, the Taiwanese companies will face tougher export
01:39restraints from Beijing on the sales to China, regardless of Taiwan's own policy choices.
01:47This news also comes a day after the U.S. expanded its blacklist of Chinese tech firms such as
01:52Baidu and Alibaba, it says, are aiding China's military.
01:56How is this going to affect U.S.-China relations?
02:00The U.S.-China AI competition is entering into a new phase of dual-use ecosystem competitions.
02:09So it's not just a company by company.
02:12It's the entire dual-use ecosystem competitions.
02:16And why is that?
02:17It's because China is using this whole-of-nation approach to really leverage its civilian and
02:24commercial capabilities for the PRA's military power.
02:30And then we know that Chinese private sector, private companies are all subject to China's
02:36national security laws.
02:38For instance, like the national intelligence law or the counter-espionage law, which will
02:44allow Beijing to really access and use those technologies and data in the name of national
02:51security.
02:52There will be more opportunities for the non-red supply chain, the kind of trusted AI infrastructure,
02:59the kind of clean supply chain, free from the Chinese coercion, free from the ideological
03:06control, I believe this will be the future trend.
03:11So that Taiwanese tech companies, I think they should seize these opportunities.
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