Taiwan to probe suppliers helping Huawei with China chip plants

Taiwan will investigate whether Taiwanese firms helping Huawei Technologies Co. with chipmaking plants in China violated US sanctions, ramping up scrutiny of a company at the heart of Washington-Beijing tensions over technology.

Minister of Economic Affairs Wang Mei-hua told lawmakers Wednesday her agency has agreed to launch a probe into that unusual relationship. She was responding to a request by ruling Democratic Progressive Party lawmaker Lai Jui-lung during a legislative session that followed a Bloomberg News report this week identifying four firms working on chip plants backed by Huawei in China. Lai asked for a preliminary report on the probe within a month.

The local Central News Agency also cited an unidentified Economic Affairs ministry official saying its investment department will look into whether the firms are conducting their businesses in China within the scope of an original application approved by Taipei.

Several Taiwanese technology companies are helping Huawei build infrastructure for an under-the-radar network of chip plants across southern China, Bloomberg News reported, an unusual collaboration that risks inflaming sentiment on a democratic island grappling with Beijing’s growing belligerence.

They included a unit of Taiwanese chip material reseller Topco Scientific Co., Cica-Huntek Chemical Technology Taiwan Co., a subsidiary of Taipei-based L&K Engineering Co., and a subsidiary of construction specialist United Integrated Services Co., according to a Bloomberg News investigation.

The Taiwanese presence in Huawei’s efforts could trigger a backlash given tense relations between the island and the Chinese Communist Party, which claims the territory as its own. The rocky relationship is a key issue in Taiwan’s presidential election in January.

The four firms are assisting with waste water and environmental projects, and these are not core technologies restricted by the Taiwanese government for China, Wang told lawmakers.

It’s unusual, at a time when Beijing threatens military action over independence efforts, that members of the island’s most important industry may be helping US-sanctioned Huawei develop semiconductors to effectively break an American blockade. Those sanctions were called into question after Huawei unveiled a smartphone in late August with an advanced made-in-China chip, spurring alarm in Washington and calls to completely cut off Huawei and its Shanghai-based chipmaker Semiconductor Manufacturing International Corp.

US Commerce Secretary Gina Raimondo told a Senate Commerce Committee hearing Wednesday that reports of a chip breakthrough by Huawei are “incredibly disturbing” and emphasized that her department needs more ways to enforce its export-control regime.