Taiwan is preparing to tighten controls on advanced AI chips and servers shipped to China, according to Bloomberg.
The move would align Taipei's export rules more closely with US restrictions on sensitive semiconductor technology.
Minister of Economic Affairs Kung Ming-hsin told Bloomberg News earlier this week that the government plans to add AI servers and advanced semiconductors to its controlled-items list.
Under the proposed rules, unauthorized shipments of restricted AI hardware to China would become a criminal offense under Taiwan's Foreign Trade Act.
Kung did not provide a timeline for implementation, according to Bloomberg.
Taiwan is home to Taiwan Semiconductor Manufacturing Co. (TSMC), the world's biggest contract chip-maker and a key producer of Nvidia chips.
Bloomberg reported that Nvidia processors have continued reaching Chinese buyers through alleged smuggling networks operating across Southeast Asia despite US restrictions.
Taiwan currently does not treat unauthorized AI chip exports to China as a criminal offense, making the proposed measures a significant change in enforcement.
The export-control discussions come as TSMC expands its US manufacturing footprint with a planned $265 billion investment, amid US President Donald Trump's push to bring advanced chip production onshore.
TSMC is also discussing a potential role in Elon Musk's Terafab project.
TSMC CEO C. C.
Wei and Musk have both confirmed discussions about the project.
"We are still in discussion, let me say that," Wei told analysts during TSMC's analyst call following its results release on Thursday.
"But the fab has got to be run by TSMC."
The comments followed Musk's statement a week earlier that his companies would build and operate Terafab themselves.
Musk said TSMC could potentially sublease part of the planned site but would not run its manufacturing operations.
TSMC separately confirmed a Reuters report that it is considering fabs in Texas, but the company provided no new information.
