Explosive Taiwan Probe Delves into Companies Linked to Huawei's Controversial Chinese Suppliers
Taiwan probes firms for potential violations of US sanctions & investment rules, as they allegedly provided services to Chinese companies involved in Huawei's chip factory construction
Taiwan is currently conducting an investigation to determine if four of its companies violated either US sanctions or domestic investment regulations. These firms allegedly rendered services to Chinese companies involved in assisting Huawei in constructing chip factories. Emile Chang, an official from the Ministry of Economic Affairs overseeing investment reviews, informed CNN on Friday that the government has recently launched an "administrative probe" targeting the mentioned Taiwanese companies, as reported in the media.
The investigation will ascertain whether their business operations in China align with the approvals granted by the ministry, he stated. In the event of any rule violations, each company may face a maximum penalty of 25 million New Taiwan dollars ($777,000).
The ministry will also investigate whether Topco Scientific, United Integrated Services, L&K Engineering Co, and Cica-Huntek Chemical Technology have violated any US sanctions, stated Chang. All four companies have denied any wrongdoing and stated in separate statements that they are engaged only in wastewater management, interior decoration, or approved construction work in Taiwan, and do not supply semiconductor materials or equipment.
In the recent years, Huawei has emerged as a representation of the technological rivalry between the United States and China. Concerns over Huawei's alleged espionage on behalf of the Chinese government have led to efforts by Washington, as well as its allies in Europe and Asia, to restrict the company's access to advanced chips and chipmaking technology.
Huawei consistently refutes these allegations and has not provided a comment in response to CNN's request.
The company, previously the second largest producer of smartphones globally, has been striving for a recovery since it was affected by US export restrictions implemented in 2019.
Numerous Taiwanese companies, such as the chip behemoth TSMC and Apple supplier Foxconn, have operations in China and are deeply intertwined with its supply chains. However, the Taiwanese government closely monitors the activities of its companies and prohibits the production of its cutting-edge technology in China.
A Huawei Technologies Co. store in Beijing, China, on Friday, September 22, 2023.
Andrea Verdelli/Bloomberg/Getty Images
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Taiwan's Minister of Economic Affairs, Wang Mei-hua, was questioned by a lawmaker about a Bloomberg report stating that the four companies had purportedly offered services to assist Huawei in constructing chip manufacturing facilities in China. In response, Wang clarified that the four companies had supplied "wastewater and environmental protection equipment" to Huawei's factories, emphasizing that these items were distinct from the designated critical technologies that could potentially pose a threat to national security as identified by the Taiwan government.
Taiwanese companies have long been navigating the delicate balance of capitalizing on China's business prospects while steering clear of any potential breaches of export regulations, especially amid the increasing military tension emanating from Beijing. These cross-strait dynamics are of utmost importance in Taiwan's upcoming presidential election slated for January.
China continues to be Taiwan's biggest trading partner, even though the ruling Communist Party of China asserts its claim over Taiwan, a home to 24 million people, despite not having had previous control over it. The party has consistently pledged to unify Taiwan with mainland China, even employing force if deemed necessary.
