Taiwan plans to criminalize AI server exports to China with up to five-year prison terms

According to Bloomberg, Taiwan's Ministry of Economic Affairs plans to expand its list of controlled exports to include AI servers and the latest chips, aiming to align its policies with U.S. trade bans against China.

Under the proposed regulations, once effective, anyone caught smuggling these items will face criminal charges under the Foreign Trade Act, carrying a penalty of up to five years in prison and/or a fine of approximately $92,500. Previously, Taiwan did not treat AI chip exports to China as a crime; violators were charged under other laws such as fraud or money laundering, similar to practices in Singapore.

"Going forward, some of our measures on controlled items will correspond to American ones because we have made quite some commitments in the Agreement on Reciprocal Trade," said Kung Ming-hsin, Taiwan's Minister of Economic Affairs. The agreement was signed earlier this year, reducing U.S. tariffs on Taiwanese goods to 15% in exchange for direct investments in the U.S. tech industry.

This move follows recent investigations into Super Micro employees accused of smuggling $2.5 billion worth of Nvidia AI servers. Taiwanese authorities raided Super Micro's Taipei offices, leading to indictments of nine individuals. The new legal framework makes it easier for prosecutors to charge AI chip smugglers but may provoke Beijing, which has previously condemned Taipei's export restrictions on Huawei and SMIC.