how an investigation risks adding fuel to a well-stoked fire

An investigation is opened in Taiwan against four companies suspected of having illicitly collaborated with Huawei. To the question of the American embargo against the Chinese firm is now added another very tense geopolitical issue.

Here is new proof that the affair between Huawei and the United States can have repercussions well beyond the technology sector alone. The soap opera is experiencing a new twist where Taiwan plays the leading role. Enough to add fuel to the fire of an already burning geopolitical issue facing China.

Indeed, as relayed Reuters, the Taiwanese government has opened an investigation against four companies in the country suspected of maintaining illicit links with companies linked to Huawei. At the same time, Taipei is considering “ stricter rules on key technologies“. An initiative potentially fraught with consequences. To know why, you definitely need a little context.

The American embargo against Huawei

As a reminder, Huawei has been under an embargo from the United States since 2019. A very severe embargo which has gradually tightened to prevent, among other things, two fundamental things:

Thus, Huawei smartphones which enjoyed great popularity, particularly in Europe, are deprived of the Play Store and several popular applications. In addition to this, it has become very complicated for the firm to design phones as suppliers are rare.

On the Washington side, intelligence services accuse Huawei of exploiting its network infrastructure to carry out espionage activities on behalf of Beijing. All this in a context of very tense relations between the two superpowers, the United States and China.

Huawei’s counterattack

With all these obstacles, Huawei has obviously suffered. The firm has completely gone into “survival” mode while drastically reducing its presence in Europe, a promising market for the group.

However, in recent times, Huawei seems to be preparing a global offensive which would confirm many of a harbinger of a comeback. A recent smartphone, the impressive Huawei Mate 60, symbolizes this newfound momentum. The latter notably signals the return of 5G to smartphones, enough to attract strong suspicion around its Kirin 5G 9000S chip.

How did Huawei manage to integrate a 5G chip despite all the problems it is experiencing on its supply lines following an embargo designed to completely stifle the company? The answer may lie with Taiwan.

What Taiwanese companies are accused of

It must be remembered that Taiwan is THE essential country in the semiconductor market. The island state occupies the position of world leader by a long way. Thus, the national giant TSMC alone produces around a quarter of the semiconductors sold worldwide.

The open investigation, however, does not concern TSMC. The four companies targeted are Topco Scientific, L&K Engineering, United Integrated Services and Cica-Huntek Chemical Technology Taiwan. And if Taiwanese firms are not prohibited from having activities in mainland China, they do not have the right to produce technologies deemed sensitive there. Their on-site investments must also comply with a strict set of rules.

However, it is precisely on these points that the four companies in the crosshairs of Taipei – and especially Wang Mei-hua, the Minister of the Economy – are said to have erred, although they all deny it outright. In an article preceding that of Reuters ,Bloombergindicated that the companies in question would have worked hand in hand with Huawei to build infrastructure dedicated to chip manufacturing.

Who knows ? This may be part of the famous secret network of factories that Huawei would have formed to circumvent the American embargo, but these are only suppositions at the moment. On the other hand, if the accusations are proven, it will be a safe bet that there is a direct link between these factories and the revival of Huawei’s Kirin chips.

The major issue between Taiwan, the United States and China

The dominance that Taiwan enjoys in the semiconductor market is an invaluable guarantee of survival for this state. Indeed, all electronic products depend on this sector. Without these chips, there will be no smartphones, no electric cars and not even advanced weapons technologies. This obviously encourages the United States, the great ally, to maintain more than ever the protection it offers to Taipei. A major challenge facing China which is increasingly asserting its sovereignty over Taiwan.

It is also partly this key role in semiconductors which allows Taiwan to continue to do business with Beijing which, despite immense and constantly growing military tensions, remains the island’s leading trading partner. . Many Chinese ships pass through the gigantic port of Kaohsiung, very close to the Formosa Strait, every day.

In short, as you will have understood, the American embargo against Huawei already represented a tortuous economic, political and technological hodgepodge. Now we add the thorny problem of Taiwan. The already bad situation can therefore become even more harmful. It promises.