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Taiwan firms say business with Huawei-linked China chipmakers not illegal

ROC Central News Agency

10/04/2023 08:45 PM

Taipei, Oct. 4 (CNA) Two Taiwanese companies identified in a Bloomberg report as doing business with Huawei-linked chipmakers in China said Wednesday their dealings in the country did not violate U.S. sanctions and were in line with national security laws.

Citing the Semiconductor Industry Association, a U.S. industry lobbying organization, Bloomberg reported Tuesday that Huawei had set up "its own shadow network of chipmakers" with the support of the Chinese government in a bid to evade U.S. sanctions.

Bloomberg's report suggested that the U.S-sanctioned 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, with involvement from four Taiwanese firms - chip material reseller Topco Scientific Co., cleanroom equipment supplier L&K Engineering Co., construction specialist United Integrated Services Co., and chemical supply system provider Cica-Huntek Chemical Technology Taiwan Co.

According to Bloomberg, subsidiaries of the four Taiwanese companies had engaged in "unusual" dealings with the three firms, in a manner that "may be helping Huawei develop semiconductors to effectively break an American blockade."

In a statement on Wednesday, L&K Engineering said its Suzhou-based subsidiary was engaged in architecture interior work and electric and line pipe layout, adding that its business in China did not involve any technologies and semiconductor equipment sales restricted by Washington.

Meanwhile, Cica-Huntek Chemical Technology said that although the company has received orders from Pengxinwei and Pensun since June 2022 to provide chemical supply system solutions for the two Chinese firms' plants, they had never provided any IC equipment.

Cica-Huntek Chemical Technology added that as the company has conducted business under law and Taiwan's national policy, it will continue to pursue its contracts with the two Chinese clients.

The statements from Cica-Huntek Chemical Technology and L&K Engineering come a day after Topco Scientific and United Integrated Services. issued denials that their businesses in China had broken any laws by operating in the country.

On Tuesday, Taiwan's Economics Minister Wang Mei-hua (王美花) told reporters that to her knowledge, the four Taiwanese companies were not supplying any key technologies or equipment to Huawei as the country's law bars local companies from providing key technologies to China, while investing in the Chinese market.

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.

(By Chang Chien-chung and Frances Huang)

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