Huawei and SMIC, two Chinese companies, may face challenges in accessing necessary resources for the development of AI chips due to export controls imposed by Taiwan.

According to a report by Bloomberg, the Taiwanese International Trade Administration has updated its list of entities to include Huawei, SMIC, and their subsidiaries, categorizing them as strategic high-tech commodities. As a result, Taiwanese companies will require government approval before exporting any materials to these entities.

Consequently, Huawei and SMIC will be restricted from accessing Taiwan’s advanced technologies, materials, and equipment for plant construction, which could potentially hinder China’s progress in developing novel AI semiconductors, as stated by Bloomberg.

In a statement, the trade administration explained, “As of June 10, we have added 601 entities from Russia, Pakistan, Iran, Myanmar, and mainland China, including Huawei and SMIC, to the entity list in order to counter arms proliferation and address other concerns related to national security.”