Taiwan reverses chip export restrictions on South Africa after diplomatic push

Taiwan has lifted restraints on the export of semiconductors to South Africa just two days after it had imposed them. The development highlights Taiwan’s reluctance to utilise its leading chip-production industry to navigate its way out of diplomatic confrontations. The country’s Ministry of Economic Affairs, which made the move after consultations with the Ministry of Foreign Affairs, said it is aimed at creating room for talks with Pretoria.

The controls were originally announced at the beginning of this week, following Pretoria’s relocation of Taiwan’s liaison office from the capital city to Johannesburg. move Taipei interpreted as a demotion of its status and a backhanded attack on its sovereignty.

The controls required firms importing cutting-edge semiconductors to secure advanced approval before the shipments could leave Taiwan, which may affect the sectors of the main South African industries, such as automotive manufacturing, industrial automation, and AI development.

The South African Government moved with haste, issuing a call for negotiations over Taiwan’s de facto embassy site. Following negotiations between the two governments, Taipei suspended the actions subject to further diplomatic negotiations.

From tensions to talks

This week’s reversal highlights Taiwan’s balancing act as the world’s semiconductor hub. The island supplies more than 60% of the world’s semiconductors and more than 90% of the most advanced chips that are used in AI systems, electric vehicles, and consumer electronics. Relying on its chip exports as a diplomatic tool can be leveraged to pressure trade partners. However, this risks destabilising global supply chains and attracting unwanted geopolitical attention.

Taiwan’s Foreign Ministry had previously explained the restrictions as a move to protect national dignity, with Philippe Yen, Director-General of the Department of West Asian and African Affairs, saying that the government would work closely with trade authorities to carry out enforcement.

“To protect our sovereignty and national dignity, we are coordinating with the agencies on countermeasures like possible restraint on chips,” Yen had said earlier this week when the restrictions were first announced.

Read also: Taiwan imposes chip export restrictions on South Africa over dispute

The action triggered immediate concern in South Africa, where advanced semiconductors are increasingly critical to industries heading towards automation and electric cars. Vehicle assembly plants rely on chips for supply chains, sensors, and electrical systems. Supply chain dislocation could slow down projects and slow industrial growth at a time when South Africa is preparing to host the G20 leaders in November.

Experts had warned that a short-term disruption can have lasting effects on companies that produce AI models, robotics goods, and intelligent infrastructure. South African manufacturers had already begun sourcing from other suppliers, but none of those suppliers can match Taiwan’s technological capability and scale.

Global implications and stakes

The South African government’s relocation of Taiwan’s liaison office is part of a wider realignment of its foreign policy. The government has been firm in its commitment to the “One China” policy, as stipulated in UN Resolution 2758, accepting Beijing as China’s sole representative in international affairs.

Officials framed it as a routine administrative shift, although it was viewed by many as a diplomatic downgrade. The move was condemned by Taiwan, and around the world, it was viewed as a pro-China alignment.

By resisting the immediate application of export controls, Taiwan would be attempting to de-escalate tensions without forfeiting the prerogative of re-imposing measures if negotiations fail. Suspension does not reverse the restrictions but shelves them until negotiations.

The move puts the extent to which semiconductors have been reimagined from factory components to geopolitical tools in the spotlight. Taiwan’s dominance of chip production gives it leverage in disputes, but the move also puts its role in the global economy in the spotlight.

Next steps

Taipei’s decision to pause the controls suggests an opening for diplomacy. Both governments now have a window to reach a compromise over the office relocation that addresses Taiwan’s concerns without escalating trade measures that could hurt businesses in both countries.

In the meantime, South African businesses are expected to keep contingency plans at hand in the event export controls are reinstated. Industry groups have called on Pretoria to secure stable access to sophisticated semiconductors, warning that disruptions would scuttle advances in vital sectors.

At the global level, the incident represents yet another example of rising integration between technology and foreign policy. Today, semiconductor supply chains are at the centre of trade, national security, and diplomacy. Such tensions have already materialised in Taiwan-China, US-China, and US-Europe relations regarding the production and export of chips.

For Taiwan, the crisis is a test of its ability to defend its sovereignity using its power as a reliable supplier of critical technology to the world. For South Africa, it is a demonstration of the cost of foreign policy at a time when access to advanced technology will dictate economic growth.

As negotiations continue, the world will be watching. The outcome won’t only affect Pretoria-Taipei bilateral affairs but could also decide the precedent for the use of Taiwan’s semiconductor market as a diplomatic lever in geopolitics in the future.