Beijing has strongly condemned Taiwan's recent decision to blacklist Chinese companies, including Huawei Technologies Co. and Semiconductor Manufacturing International Corp. (SMIC), vowing to take "forceful measures" in response to what it calls "technological blockades".
Swift retaliation promised
On Wednesday, Taiwan Affairs Office spokeswoman Zhu Fenglian stated that Beijing would "resolutely safeguard the normal order of cross-strait economic and trade exchange".
While she did not elaborate on the specific nature of these measures, Zhu condemned Taiwan's decision as "despicable" and suggested it demonstrates President Lai Ching-te's loyalty to the US government.
According to Bloomberg, she further asserted that "attempts to decouple will not delay the progress of industrial upgrading on the mainland" and will instead "only damage the competitiveness of Taiwanese enterprises and the island's economy".
Historic blacklisting targets major players
Taiwan's International Trade Administration (ITA), under the Ministry of Economic Affairs, updated its Strategic High-Tech Commodities Export Control Entity List on June 15, 2025, with the changes becoming effective on June 10, 2025. This move saw 601 entities added to the list, including prominent Chinese companies like Huawei and SMIC. This marks the first time Taipei has used such a blacklist on major Chinese companies.
The additions were made due to concerns over the companies' involvement in weapons proliferation and national security risks. The ITA's decision followed an inter-ministerial review meeting and aligns with sanctions and control lists from the United Nations Security Council and allied nations.
New restrictions reshape supply chains
The new restrictions require Taiwanese firms to obtain an export license from the ITA before doing business with any listed entity. Customs authorities have been instructed to enforce border inspections, and shipments to listed entities without a valid license will be blocked. This is likely to, at least partially, cut off Huawei and SMIC's access to Taiwan's plant construction technologies, materials, and equipment essential for building AI chips.
Industry adaptation under pressure
The implementation of these regulations was swift and caught some in the industry off guard. However, key Taiwanese suppliers of components for Huawei smartphones and tablets have noted that most shipments currently fulfilled from manufacturing sites located in China remain unaffected by the new controls. These suppliers have already consulted with government agencies to verify this.
Industry sources indicate that Huawei has been increasing efforts to localize its component supply, relying more heavily on Chinese vendors, which has gradually diminished the role of some Taiwanese firms.
Despite this, Huawei remains a top-tier customer for Taiwanese component makers. Mounting geopolitical pressures are also prompting US firms to exit China-based production, leading Taiwanese manufacturers to become increasingly dependent on Chinese clients, including Huawei, to maintain their local capacity.
Article edited by Jerry Chen
