00:00Taiwan's economy ministry says talks continue with Washington on regulating high-end tech.
00:06That's after Bloomberg reported that Taipei is considering stricter export controls on
00:11AI chip sales to China to align with similar U.S. measures.
00:16The report says officials here are looking at new legal tools to keep advanced hardware
00:21from being diverted to China from Taiwan.
00:24This includes AI servers using NVIDIA chips.
00:27It comes as U.S. lawmakers push for tighter restrictions on chip makers like TSMC over
00:33concerns that Chinese firms could still get advanced AI chips through intermediaries.
00:39The ministry did not comment on whether new export controls are in the works.
00:46To understand the potential impact of these new export measures on Taiwanese chip makers,
00:51our reporter Lily Lamartina spoke to Domingo Yang from the Institute for National Defense
00:56Defense and Security Research.
00:59Taiwan is considering stricter export controls on the sale of AI chips to China.
01:03Why is the government considering this now?
01:05I think at the enforcement level, it will be a major breakthrough to have a ship away from
01:12Taiwan's previous ambiguous posture on the export control vis-a-vis China toward a clear stance
01:20on countering the sentient evasions by imposing actual criminal penalties on AI chief smugglers.
01:28And I think second, it will send a clear signal that Taiwan is willing to share the deterrence burden
01:34with the United States and to help maintain the regional peace and status quo by ensuring that
01:40the most advanced AI chiefs covered by the U.S. engines are not transferred to China.
01:45Now, how would this impact Taiwanese companies, especially chip giant TSMC?
01:49TSMC's revenue from mainland China has been actually declining from about 20% of the total sales
02:00in 2019 to around 7% in last year.
02:05So I think the overall risk for TSMC is manageable.
02:10But for AI service companies like Foscom, Westrong and others, the risk and the potential losses could be higher.
02:19But on the other hand, we also have to recognize that China is trying to strengthen its self-reliance
02:25and to reduce its dependency from the external supply chains.
02:31This means that I think in the foreseeable future, the Taiwanese companies will face tougher export restrictions from Beijing
02:40on the sales to China, regardless of Taiwan's own policy choices.
02:47This news also comes a day after the U.S. expanded its blacklist of Chinese tech firms such as Baidu
02:52and Alibaba,
02:53it says, are aiding China's military. How is this going to affect U.S.-China relations?
02:58The U.S.-China AI competition is entering into a new phase of dual-use ecosystem competitions.
03:08So it's not just company by company, it's the entire dual-use ecosystem competitions.
03:15And why is that? It's because China is using this whole-of-nation approach to really leverage its civilian and
03:24commercial capabilities
03:25for the PRA's military power. And then we know that Chinese private sector, private companies,
03:33are all subject to China's national security laws, for instance, like the national intelligence law or the counter-espionage law,
03:42which will allow Beijing to really access and use those technologies and data in the name of national security.
03:51There will be more opportunities for the non-red supply chain, the kind of trusted AI infrastructure,
03:59the kind of a clean supply chain, free from the Chinese coercion, free from the ideological control.
04:06I believe this will be the future trend. So that Taiwanese tech companies, I think they should seize these opportunities.
04:19That was Domingo Yang from INDSR.
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