Taiwan looks into claims local companies helped Huawei advance China chipmaking

Plus: EU is looking its own strategic export controls – and not just to China

Taiwan is said to be investigating whether local companies have been helping Huawei to set up chip factories in China, despite US restrictions. Meanwhile, the EU is looking at further export controls on technology to authoritarian regimes, which is likely to include China.

The Taiwanese Ministry of Economic Affairs said it will look into claims that businesses based in the country have been helping China's technology giant, Huawei, to establish chipmaking infrastructure in the Middle Kingdom in order to evade sanctions, according to Bloomberg.

This follows earlier reports by the same newswire naming four companies that it claimed may have been involved.

These companies reportedly comprised a distributor of semiconductor and optoelectronic components and equipment; a cleanroom company; a chemical supplier; and an engineering consultancy. have denied the claims.

Later, a report by Nikkei Asia cast doubt on whether some of the companies have been involved in anything that could be construed as violations of US sanctions. It said that the distributor Bloomberg named had only been involved with environmental protection and there had been no business transactions involving semiconductor materials or equipment, for example.

The engineering consultancy reportedly noted that its subsidiary had been involved in renovating a plant for a semiconductor manufacturer said to have ties with Huawei, but said it "complies with the laws, policies and regulations of all jurisdictions."

Reports surfaced some months back that Huawei was seeking to build a covert network of semiconductor facilities across China to enable the company to cope in the face of US sanctions that have choked off its supply of chips.

According to the trade body for US chipmakers the Semiconductor Industry Association (SIA), Huawei had taken possession at least two existing factories and was building a minimum of three others. It was said to be doing this under the names of other companies to conceal its involvement, allowing it to create a "shadow manufacturing network."

These stories may have been given credence by Huawei's surprise announcement of a new 5G smartphone using homemade chips last month, which it was believed the company would not be capable of delivering. This may have been a contributing factor in reports that the US plans to tighten up its export restrictions on semiconductor technologies to China.

It may soon be joined by EU-wide export controls on critical technologies, not strictly aimed at China, but to address the risk of such technologies being used in violation of human rights or where there may be a crossover between civilian and military uses in some countries.

The European Commission identified four technology areas that are considered the most sensitive, covering advanced semiconductors, biotechnologies, artificial intelligence, and quantum technology. Many of these align with US bans on technology to authoritarian regimes.

Initially, the Commission is recommending that EU member states, together with the Commission itself, conduct collective risk assessments of these four areas by the end of this year.

European Commission vice president Věra Jourová said there needed to be a "united EU position, based on a common assessment of the risks," so that Europe would remain "an open and predictable global partner," but one that "nurtures its technological edge and addresses its dependencies."

Thierry Breton, commissioner for Internal Markets, called the move an important step for the EU's resilience. "We need to continuously monitor our critical technologies, assess our risk exposure and – as and when necessary – take measures to preserve our strategic interests and our security," he said. ®

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