Taiwan indicts 10 for alleged resale of US chips to China

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TAIPEI, Taiwan - Prosecutors in Taiwan have indicted 10 Taiwanese people for allegedly using forged documents to obtain restricted US chips, some made in the Philippines and export them to China for potential use in military weapons.

"The illegal end-users of such chips are evidently China's military industry, which uses these chips to manufacture sophisticated weapons," said the indictment, obtained Wednesday by AFP.

That "helps bolster China's military strength, posing a serious threat to our national security", it said.

China claims democratic Taiwan is part of its territory and has threatened to use force to seize it.

Prosecutors say Chen Chien-hsiung, who heads several tech companies, and his co-defendants were aware that the sale of American "strategic high-tech goods" must comply with US export control regulations.

The 10 accused, all Taiwanese, also allegedly knew that shipping the microchips to China, Hong Kong or Macau was strictly prohibited.

Chen and the others are accused of conspiring since 2017 to pose as Taiwan's National Chung-Shan Institute of Science and Technology (NCSIST) and affiliated companies.

By doing so, they had purchased the controlled chips from US companies Analog Devices and Texas Instruments, Taiwan New Taipei District Prosecutors Office said.

To circumvent scrutiny, they allegedly repackaged the controlled chips made in the Philippines, South Korea and Singapore, and labelled and disguised the products as non-controlled chips "made in Taiwan".

The 10 were charged in late September with offenses including fraud, document forgery and money-laundering.

Prosecutors have requested a 10-year prison sentence for Chen, and sentences from one to eight years for the other defendants.

The defendants allegedly exported the chips to Hong Kong, including to companies under the de facto control of China -- reaping profit of more than NT$300 million (US$9.4 million).

The semiconductors in question could be used for military applications including "radar receivers, electronic reconnaissance and jammers", the indictment said.

The chips could ultimately be supplied to "research units in China for the manufacture of missiles and military radars", it added. — Agence France-Presse