Taiwan targets illicit AI server exports to China with five-year prison terms

Taiwan is set to crack down on illicit exports of artificial intelligence servers and cutting-edge chips to China, with the threat of five-year prison sentences, according to a recent report by Bloomberg. The new measures align Taiwan's policies with those of the United States, in response to American trade restrictions. The Foreign Trade Act will impose harsh penalties on those caught smuggling controlled items, with possible imprisonment and substantial fines.

This move comes after Taiwan signed an agreement with the U.S. earlier this year, which includes tariff reductions on Taiwanese goods. The U.S. has been actively combating the smuggling of advanced Nvidia chips into China, with notable cases such as the prosecution of Super Micro employees accused of trafficking $2.5 billion worth of AI servers.

Taiwanese authorities have already taken action against Super Micro in connection with the Nvidia B300 smuggling probe, leading to the indictment of nine individuals. The expansion of the Foreign Trade Act will be one of the strictest export control measures enacted by Taiwan against China, potentially satisfying the U.S. in their efforts to regulate the flow of advanced AI chips into China.

However, Beijing has already expressed disapproval of Taiwan's export restrictions on Huawei and SMIC in the past.