Taiwan tightens rules around local tech firms sharing tech with China

Will vet even outbound investments under new rules

Taiwan will screen proposals by local tech companies that plan to transfer technology to China or invest in mainland businesses.

"All technical cooperation plans containing technology licensing and technology transfer should be reviewed beforehand" a spokesperson for the Ministry of Economic Affairs told The Register. Previous arrangement allowed companies to apply for approval after making such investments.

The plan will come into effect within about two months, the spokesperson said.

Taiwan is home to Taiwan Semiconductor Manufacturing Company and MediaTek, two of the world’s largest chipmakers, as well as numerous smaller silicon-slingers. Those companies sometimes use Chinese manufacturers or other services, or are offered other incentives such as tax breaks to work on the mainland. In either scenario, it's feasible that China can observe their operations and perhaps pinch some tech.

As tensions between China and the US escalate, Taiwanese officials don't want to be seen as allowing a back door for chip tech to reach the Middle Kingdom. The new regulations fill in this workaround by giving the government more control over which Taiwanese companies it allows to move across the strait.

The restrictions bring Taiwan’s rules in line with many other western countries. Washington effectively blocked Huawei’s access to US-designed chips. Other nations review Chinese investments in local industries. And of course China plays this game too, insisting that foreign firms form joint ventures with local companies if they wish to tap the nation's colossal markets. ®

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