Taiwan firms not supplying key technologies to Huawei: Economics minister

Taipei, Oct. 3 (CNA) Four Taiwanese companies which are alleged to be helping Chinese telecom firm Huawei Technologies Co. build "infrastructure for an under-the-radar network of chip plants" are not supplying critical technologies to the Chinese client, which has been sanctioned by the United States, Taiwan's Economics Minister Wang Mei-hua (王美花) said Tuesday.

Speaking with reporters, Wang said Taiwan's law bars local companies from providing key technologies to China, while investing in the Chinese market, and to her knowledge, the four companies named in a Bloomberg report earlier in the day are not supplying any key technologies or equipment to Huawei.

According to an investigation by Bloomberg, the four Taiwanese companies, which have engaged in "unusual" cooperation with U.S.-sanctioned Huawei were a subsidiary of chip material reseller Topco Scientific Co., a subsidiary of cleanroom equipment supplier L&K Engineering Co., a subsidiary of construction specialist United Integrated Services Co. and chemical supply system provider Cica-Huntek Chemical Technology Taiwan Co.

"At a time when China threatens Taiwan regularly with military action for even contemplating independence, it's unusual that members of the island's most important industry may be helping U.S.-sanctioned Huawei develop semiconductors to effectively break an American blockade," the report said.

Bloomberg said the U.S. sanctions against Huawei were called into question after the Chinese firm unveiled a smartphone in late August with an advanced made-in-China chip, which set off alarm bells in Washington with the U.S. government urged by U.S. congressmen and women to completely cut off Huawei and Shanghai-based contract chipmaker Semiconductor Manufacturing International Corp.

The report cited the Semiconductor Industry Association as saying Huawei has set up "its own shadow network of chipmakers" with the support of the Chinese government. In addition, Huawei has been relying on three little-known firms in Shenzhen -- Pengxinwei IC Manufacturing Co., Pensun Technology and SwaySure Technology Co. -- to roll out chips based on its designs.

Wang said all Taiwanese investors in China should abide by not only Taiwan's national security law but also keep a close eye on whether they violate U.S. export control measures if the equipment they use is restricted by American rules.

Other Ministry of Economic Affairs (MOEA) officials said the ministry will continue to watch closely how Taiwanese firms do business with Huawei in a bid to protect their interests.

The officials said the MOEA reminded Taiwanese companies about the possible risks of doing business in China, adding that Taiwanese firms should observe U.S. foreign direct product rules, or FDPR, which were first introduced in 1959 to control sales of U.S. technologies.

In response to the Bloomberg report, United Integrated Services and Topco Scientific said they did not violate any laws when doing business in China.

United Integrated Services said since it was founded in 1982, all of its business and investments in China have adhered to Taiwan's national policy.

While its subsidiary based in China's Jiangxi province was contracted by SwaySure Technology for construction projects in Shenzhen, United Integrated Services said the contracts were executed in accordance with law.

For its part, Topco Scientific said while it secured orders from Shenzhen's Pensun to provide environmental protection services in early 2022, the project did not involve any critical technologies.

Topco Scientific emphasized that it did not provide any semiconductor raw materials or equipment to Pensun, adding that the Chinese company had not been placed on the U.S. sanctions list at the time the contracts were signed.

Topco Scientific said the contract with Pensun will continue and undertook to prudently consider future cooperation with the Chinese firm.

L&K Engineering and Cica-Huntek Chemical Technology were not immediately available to comment on the Bloomberg report.