Taiwan, Worried About China Stealing Its 'Crown Jewel,' Pushes For Speedy Passage Of Laws Protecting Chip Industry

In a bid to save its crown jewel, Taiwan's Premier has called for the swift passage of revisions to laws to prevent China from stealing its semiconductor technology, according to a Reuters report.

This came after the Taiwanese cabinet, in February, proposed tightening the rules amid rising concerns that China is stepping up its economic espionage.

Taiwan is home to the chip-manufacturing giant Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), which accounts for 92% of the world's most advanced semiconductor manufacturing capacity and has what Beijing needs — chip expertise in spades, Reuters noted.

With rapidly evolving artificial intelligence technology, chips play an important role in all technological gadgets ranging from phones to fighter jets. It is also to be noted that TSMC is a long-time chip partner to Apple Inc (NASDAQ:AAPL), handling production duties for its self-designed system-on-chips used in iPhones and other iOS products.

Premier Su Tseng-chang has told a cabinet meeting that the "red supply chain" — a reference to China — was using various methods to "infiltrate" Taiwan, and take its talent and steal its technology, according to the Reuters noted.

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Su added that the law enforcement agencies need to work together to crack down and investigate. He has asked the justice ministry to work with parliament to ensure the revisions of the proposed law are passed "at the earliest date."

Meanwhile, China has stepped up its military and diplomatic pressure and continues to force Taiwan to accept its sovereignty claims. It also recently called on U.S. House Speaker Nancy Pelosi to cancel her planned visit to Taiwan.

"If the speaker of the U.S. House of Representatives knowingly commits a sneaky visit to Taiwan, it will be a malicious provocation to China's sovereignty, gross interferences in its internal affairs, and an extremely dangerous political signal to the outside world," Chinese Foreign Minister Wang Yi said earlier.

Price Action: According to data from Benzinga Pro, TSMC shares ended 1.73% lower at $97.57 on Monday, and Apple was down 2.55% at $165.75 over the same period.