Taiwan indicts 10 for smuggling US military-grade chips to China, parts routed to missile and radar programs using forged Taiwan defense institute orders

4 hours ago 6

Taiwanese prosecutors have indicted 10 company leaders over Texas Instruments (TI) and Analog Devices (ADI) military-grade chips allegedly sold to China, the United Daily News reports. Orders for the chips allegedly used the name of Taiwan’s own defense research institute and were exported as “Made in Taiwan.” Investigators believe the chips ended up with Chinese research units building missiles and military radar.

The chips are high-speed military-industrial parts found on Taiwan’s strategic high-tech commodities list. The U.S. Commerce Department does not allow these to be shipped to China, Hong Kong, or Macau, and buyers must provide an end-user statement before the manufacturer ships. The equipment was cited to include radar receivers, electronic reconnaissance, jammers, ultrasound, communications gear, and antenna arrays.

Former employees and trading partners of three Taiwan distributors for ADI and TI, two large U.S. analog and mixed-signal chipmakers, used their own companies to order the chips. The orders went under the National Chung-Shan Institute of Science and Technology’s (NCSIST) name or in the names of other Taiwanese companies to claim use in Taiwan. The orders included written statements, which prosecutors say were false. The statements promised no export or re-export to U.S.-sanctioned parties, that they accept being bound by U.S. export regulations, and that the end-user declarations are required for sales outside of Taiwan. The distributors involved were duped, prosecutors say.

The parts themselves were manufactured in the U.S., Thailand, the Philippines, and South Korea with no processing in Taiwan that would change their country of origin, but were declared “Made in Taiwan” to fool customs officials. The buyers included Hong Kong companies, or those effectively controlled from mainland China, and the defendants profited from the venture. The three main groups of defendants made more than NT$92.75 million, NT$135.83 million, and NT$108.11 million, with four others earning from several hundred thousand to NT$6.41 million.

The charges include fraud, forgery, and Money Laundering Control Act offenses, with 2 to 10 years sought for each defendant. Prosecutors also asked the court to confiscate anything gained from the plot. The case for heavy sentences, prosecutors argue, lies in the products trafficked: military components seriously harm Taiwan’s national security and could instill distrust of Taiwan in the U.S. The trial, to take place in the New Taipei District Court if history is any indication, has no court date announced. Neither ADI nor TI has a comment on record about the case.

TI parts were previously found in Russian weapons in 2024 when third parties bought them for Russia’s military. Earlier this year, Supermicro co-founder Yih-Shyan “Wally” Liaw was charged in the U.S. over diverting servers with Nvidia chips to China, and has pleaded not guilty. In a separate Taiwanese case, Keelung prosecutors seized 50 Supermicro servers and detained three people. Ultimately, nine were indicted in August, including an Nvidia Taiwan manager and two of Supermicro Taiwan’s staff. Eight of them were charged with breach of trust and document forgery.

The chips in this case are not AI accelerators but rather radar and RF parts with practical military applications. The charges likely fall under fraud and forgery because breaking U.S. export control laws is not a crime in Taiwan. Taiwan’s own Foreign Trade Act carries prison terms for exporting listed high-tech goods to controlled areas without a permit. However, China counts as one of only 12 kinds of chipmaking equipment. A 2019 amendment raised fines for false origin labeling and illegal high-tech exports to protect the “Made in Taiwan” brand.

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