Taiwan is reportedly proposing tougher AI chip export rules, which would further restrict access to high-performance GPUs and accelerators for mainland China.

Taiwan is considering criminalizing the smuggling of AI chip servers to China for the first time, according to Bloomberg. Under current Taiwanese law, shipping AI chips to China without authorization is not a criminal offense, though authorities have warned companies against such acts and can only take action within the existing legal framework.

As part of ongoing trade negotiations with Washington, Taipei is now considering controls that would significantly expand beyond its current blacklist approach. The proposed rules would restrict AI chip sales to all Chinese customers rather than just sanctioned companies like Huawei, and would allow Taiwan to treat AI chip smuggling to China as a criminal offense.

The shift aims to strengthen authorities' ability to act against the illegal rerouting of advanced AI hardware, including Nvidia-powered servers, to China—where such sales have required U.S. government approval since 2022 to prevent Beijing from gaining military advantage through access to these processors.

Taiwan has broadly agreed to mirror the U.S. framework, likely restricting AI chips above a certain processing power threshold as Washington already does. However, the proposal is still taking shape, and Taiwan has yet to decide how closely it will follow American policy in practice. Details still need to be worked out before senior officials on both sides can formally review and approve any agreement.

The policy shift comes after Taiwan announced arrests last month of suspected chip smugglers on document falsification charges. According to Bloomberg, investigators discovered that Japan was allegedly used as a transit point, and they suspected the defendants had already successfully moved at least one shipment of servers through that route before the hardware reached Hong Kong.