Taiwan has imposed restrictions on the export of chips to South Africa, a rare move that uses its economic dominance to pressure a country that has been deepening its ties with China. The new policy requires pre-approval for the bulk of chips sold to South Africa, an unusual step that reflects Taiwan’s growing frustration with being sidelined by Beijing in the diplomatic community.
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The restrictions follow a diplomatic dispute rooted in South Africa’s decision to downgrade and relocate Taiwan’s representative office from Pretoria to Johannesburg. South Africa’s Department of International Relations and Cooperation (Dirco) stated that the move was simply “standard diplomatic practice” to reflect the “non-political” nature of the relationship, which has been in place since 1997.
Taiwan, however, views the action as a breach of a long-standing agreement. According to Taiwan’s Foreign Ministry, South Africa’s request to relocate the office intensified after the BRICS summit in 2023, which Chinese leader Xi Jinping attended. Taiwan’s International Trade Administration stated that South Africa’s actions have “undermined our national and public security,” justifying the new trade measures.
The move is a show of force from Taiwan, which controls a disproportionate share of the global semiconductor market. Taiwan Semiconductor Manufacturing Company (TSMC), for example, produces the vast majority of the world’s most sophisticated chips, which are essential for cars, AI, and industrial production. While Taiwan’s overall market share in semiconductor manufacturing is estimated to be between 50% and 70%, its share of the world’s most advanced chips is nearly 90%. This dominance gives the island significant geopolitical leverage.
The diplomatic row has also caught the attention of U.S. lawmakers. The U.S. House Committee on Foreign Affairs recently passed a bill calling for a full review of U.S. relations with South Africa and identifying government officials who may be eligible for sanctions. The bill was prompted in part by South Africa’s actions toward Taiwan, which a U.S. congressman, Chris Smith, said undermined the country’s “trustworthiness as a partner.” Smith argued that any unilateral attempt to break the 1997 agreement with Taiwan would be unacceptable.
The dispute adds to a growing list of grievances the U.S. has with South Africa, highlighting how the country is being drawn into the escalating tensions between China, Taiwan, and their respective allies.
