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Taiwan Curbs Chip Exports to South Africa in Rare Power Move

(Bloomberg) -- Taiwan has imposed restrictions on the export of chips to South Africa over national security concerns, the first time it has used its semiconductor industry as a weapon against a country closely allied with China.

Taiwan now requires pre-approval for the bulk of chips sold to the African nation, its trade regulator said in a statement Tuesday. The decision emerged after Pretoria sought to downgrade Taipei’s representative office and force it to relocate to Johannesburg from the capital.

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The move reflects both Taiwan’s economic clout and a growing frustration with getting sidelined by Beijing in the diplomatic community. Taiwan Semiconductor Manufacturing Co. makes the majority of the world’s most sophisticated chips, essential to cars, AI and industrial production.

Official data from Taiwan show that last year it exported to South Africa roughly $4 million worth of the semiconductor-related goods that were included in export suspension list.

South Africa began pressuring Taiwan to relocate its embassy from Pretoria to Johannesburg in 2023, shortly after hosting a BRICS summit attended by Chinese President Xi Jinping, a Foreign Ministry official in Taipei previously told Bloomberg News.

The Foreign Ministry in Beijing didn’t immediately respond to a request for comment on Wednesday.

South Africa is intensifying its request as it prepares to host the Group of 20 leaders’ meeting in November that Xi is expected to attend. Pretoria severed diplomatic ties with Taiwan in 1997.

“The South African government’s actions have undermined our national and public security,” Taiwan’s International Trade Administration said in a statement. “We are adopting measures to restrict trade to maintain our sovereignty.”

TSMC representatives didn’t immediately respond to an emailed request for comment.

South Africa reiterated that its ties with Taiwan were non-political, Foreign Ministry spokesman Chrispin Phiri said. “South Africa is a critical supplier of platinum group metals, like palladium, essential to the global semiconductor industry. Our current economic diplomacy is fundamentally shifting how we engage in the global value chains.”

Phiri added that Africa’s biggest economy intends to move beyond an extractive model to one of strategic value-add. “This means building advanced industries at home, transforming raw materials into high-value products. This pivot secures a more resilient supply chain for the world and unlocks advanced, sustainable growth, and job creation for South Africa.”

A South African Trade Ministry spokesman didn’t immediately respond to messages seeking comment.

--With assistance from Antony Sguazzin, Paul Richardson, Jenni Marsh, Mike Cohen and Monique Vanek.

(Updates with more context and details.)