Taiwan has suspended planned restrictions on semiconductor exports to South Africa, just days after announcing them, in a move that underscores its caution over using its globally dominant chip industry as a diplomatic weapon.
The Ministry of Economic Affairs confirmed on Thursday that the rollout of the controls would not proceed, following consultations with the Ministry of Foreign Affairs.
“After discussion with the Foreign Ministry, we have decided to suspend the release of this announcement,” the ministry said in a statement.
The restrictions, first announced on September 23, were scheduled to take effect in late November after a 60-day notice period.
They were introduced in response to South Africa’s decision to downgrade and relocate Taiwan’s representative office under pressure from Beijing.
It marked the first time Taiwan had considered imposing unilateral chip export curbs on another country, Business Insider reported.
Taiwan has suspended planned restrictions on semiconductor exports to South Africa, days after announcing the measure, in a move that highlights Taipei’s hesitation over deploying its world-leading chip industry in diplomatic disputes, Business Insider Africa reported.
The suspension highlights Taiwan’s struggle to balance its position as the world’s semiconductor powerhouse with the risks of disrupting global supply chains.
Taiwan Semiconductor Manufacturing Company (TSMC) and other domestic chipmakers are crucial to industries from automotive to artificial intelligence, and analysts have warned that wielding export controls as a diplomatic tool could rattle international markets.
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China, one of the economies most reliant on Taiwanese chips, criticized the original announcement earlier this week.
A spokesperson for the Chinese Foreign Ministry accused Taipei of “deliberately destabilising global supply chains.”
In South Africa, the proposed restrictions triggered alarm among political and business leaders, who feared damage to an already fragile manufacturing sector.
The Democratic Alliance said the curbs could cost tens of thousands of jobs and weaken competitiveness.
“Taiwan’s dominance in the production and supply of silicone semiconductor chips makes them the preferred component for many of South Africa’s largest manufacturers, especially in the automotive, information technology, and artificial intelligence sectors,” said Ryan Smith, the party’s spokesperson on international relations.
While Taiwan’s unmatched role in advanced semiconductor production gives it considerable leverage, experts cautioned that overly aggressive use of such tools risks unsettling markets, alienating partners, and inviting retaliation.
“By utilising Taiwan’s position in the global chip supply chain, this appeared to be an attempt to construct an autonomous deterrent,” said Wen-ti Sung, non-resident fellow at the Atlantic Council’s Global China Hub.
“Going forward, other governments will be looking at this example and considering not only Taiwan’s carrots but also its potential sticks,” he added.
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Image Credit: Business Tech
