Min-Yen Chiang, Deputy Director of the Economic Security Program at the Research Institute for Democracy, Society, and Emerging Technology (DSET), has contributed a chapter titled “Is Taiwan a Loophole in the Global Tech Sanctions Alliance? Assessing the Economic Security of the Semiconductor Nation through the Lens of Legal Reforms” to Taiwan in the New World Order: The Legacy of Tsai Ing-Wen, published by Brill in 2026.
Covering President Tsai Ing-wen’s two terms in office, the chapter examines how Taiwan responded to intensifying US–China technology competition and the various channels through which China sought to acquire semiconductor technologies. Drawing on publicly available information, corporate case studies, and interviews, it assesses Taiwan’s reforms in three areas—screening Chinese investment, regulating technology transfers to China, and implementing export controls—and proposes ways to strengthen institutional enforcement.
Taiwan’s Technology Security Shapes the Effectiveness of Global Controls
The chapter notes that semiconductors lie at the heart of US–China technology competition. Taiwan is not only a major global chip manufacturing hub but also home to extensive R&D talent, technological expertise, and supply-chain resources. Its ability to safeguard critical technologies therefore directly affects the effectiveness of global technology controls.
China’s efforts to acquire Taiwanese technology are not limited to importing chips directly. They also include concealing the sources of investment through companies registered in third countries, establishing unauthorised operations in Taiwan, remotely recruiting Taiwanese engineers, and relocating patents, technologies, or R&D teams to China. By identifying and managing these activities at an early stage, Taiwan can move beyond being perceived as a potential regulatory loophole and make a significant contribution to global technology security.
From Cross-Strait Industrial Integration to Economic Security
The chapter begins by reviewing the controversy surrounding Tsinghua Unigroup’s proposed investments in Taiwan in 2015. At the time, the Chinese company actively sought to enter Taiwan’s integrated circuit design sector, while the Ma Ying-jeou administration considered opening the industry to Chinese investment. The proposal encountered strong public opposition following the Sunflower Movement and was eventually shelved after Taiwan’s change of government in 2016.
After the Tsai Ing-wen administration took office, Taiwan gradually shifted its policy focus from cross-Strait industrial integration towards economic security and supply-chain resilience. Chiang notes, however, that the administration’s more substantive reforms were concentrated in its second term, when the government progressively tightened its management of flows of Chinese capital, talent, and technology.
Three Reforms Laid the Foundation
In the chapter, Chiang assesses the Tsai administration’s efforts to strengthen Taiwan’s economic security through three major reforms.
The first was the tightening of investment screening for Chinese capital entering Taiwan. Beginning in 2020, the Tsai administration expanded investigations by the Investigation Bureau into Chinese investment channelled through third countries and strengthened the organisational role of Taiwan’s investment review authorities. However, the case of Bitmain—whose operations involved Taiwanese companies and engineers in the development of AI chips—demonstrates that statutory authority alone is insufficient. Government agencies also need the professional capacity to uncover the sources of capital and the ultimate controlling relationships behind companies and investments.
The second reform strengthened the review of Taiwanese investment and technology cooperation involving China. Following legislative amendments in 2022, certain equity and technology transfers became subject to prior government approval. Nevertheless, relevant cases suggest that the government may still struggle to prevent technologies developed with support from Taiwan’s public-sector resources from flowing to China. Possible directions for future policy include broadening the range of technologies covered and improving methods for tracking technology transfers.
The third reform established a regulatory framework for “National Core Key Technologies” and increased criminal penalties for the theft of related trade secrets. Chiang recognises the significance of this reform but notes that the current system remains focused primarily on criminal prosecution after technology has already been transferred, while its preventive functions remain comparatively limited.
In one case, a Taiwanese IC design company had previously received approval to export chips to a customer that was subsequently added to a US trade restriction list. The company suspended shipments only after the United States imposed sanctions. This demonstrates the need for Taiwan to work with its partners to develop clearer and more closely coordinated export-control standards that businesses can follow.
Making Taiwan a Trusted Technology Security Partner
Chiang argues that the Tsai administration’s legal reforms laid an important foundation for Taiwan’s economic security governance. The next step is to ensure that the different regulatory frameworks function effectively together, including by strengthening investigative capacity, inter-agency coordination, and enforcement mechanisms.
Taiwan’s semiconductor capabilities have made it indispensable to global technology supply chains. Continued economic security reforms will help Taiwan become an even more reliable partner in safeguarding global technology security.
About the Book
Taiwan in the New World Order: The Legacy of Tsai Ing-Wen was edited by Julia Marinaccio and Kristina Kironska and published by Brill in 2026 as Volume 6 of the Brill Taiwan Studies Series.
The book comprises 17 chapters examining the achievements and long-term impact of President Tsai Ing-wen’s policies between 2016 and 2024 across areas including democratic governance, social reform, cross-Strait relations, defence and security, and foreign policy.
Chiang’s chapter appears in Part Two, “Cross-Strait Relations, Defence and Security,” and focuses on the transformation of Taiwan’s semiconductor industry and economic security framework amid US–China technology competition.
