Taiwanese prosecutors have indicted 10 company leaders for smuggling Texas Instruments and Analog Devices military-grade chips to China, with the defendants allegedly earning more than NT$336 million combined and the parts believed to have reached Chinese research units building missiles and military radar. The chips left Taiwan declared as "Made in Taiwan" under forged orders bearing the name of the island's own defense research institute.

United Daily News first reported the indictments. The parts at issue are high-speed military-industrial components on Taiwan's strategic high-tech commodities list — radar receivers, electronic reconnaissance equipment, jammers, ultrasound systems, communications gear, and antenna arrays. The U.S. Commerce Department prohibits shipping them to China, Hong Kong, or Macau, and requires an end-user statement before any manufacturer releases them.

How did the scheme work?

Former employees and trading partners of three Taiwan distributors for ADI and TI used their own companies to place the orders, according to prosecutors. The orders were placed in the name of the National Chung-Shan Institute of Science and Technology (NCSIST) — Taiwan's defense research institute — or in the names of other Taiwanese companies, to claim domestic use.

Each order included written end-user statements prosecutors say were false. Those statements promised no export or re-export to U.S.-sanctioned parties, acknowledged being bound by U.S. export regulations, and confirmed the end-user declarations required for sales outside Taiwan. Prosecutors say the distributors themselves were duped.

The actual buyers were Hong Kong companies, or firms effectively controlled from mainland China. The parts themselves were manufactured in the U.S., Thailand, the Philippines, and South Korea, with no processing in Taiwan that would change their country of origin — yet customs declarations claimed "Made in Taiwan."

What are the charges and the money involved?

Prosecutors charged the defendants with fraud, forgery, and Money Laundering Control Act offenses, seeking 2 to 10 years for each defendant and confiscation of all gains from the plot.

The three main defendant groups earned:

• NT$92.75 million
• NT$135.83 million
• NT$108.11 million

Four other defendants earned amounts ranging from several hundred thousand NT dollars up to NT$6.41 million.

Prosecutors argue heavy sentences are warranted because the trafficked products were military components that seriously harm Taiwan's national security and could instill distrust of Taiwan in the United States. The case will likely land in the New Taipei District Court, but no trial date has been announced. Neither ADI nor TI has commented on record.

Why fraud and forgery, not export-control violations?

The chips in this case are not AI accelerators but radar and RF parts with practical military applications. The charges likely fall under fraud and forgery because violating U.S. export control law is not itself a crime in Taiwan. Taiwan's Foreign Trade Act does carry prison terms for exporting listed high-tech goods to controlled areas without a permit — but China counts as a controlled region for only 12 categories of chipmaking equipment. A 2019 amendment raised fines for false origin labeling and illegal high-tech exports in part to protect the "Made in Taiwan" brand.

The case fits a wider pattern of U.S. components reaching sanctioned militaries through intermediaries. TI parts turned up in Russian weapons in 2024 after third parties bought them for Russia's military. Earlier this year, U.S. prosecutors charged Supermicro co-founder Yih-Shyan "Wally" Liaw over diverting servers containing Nvidia chips to China; he has pleaded not guilty. In a parallel Taiwanese case, Keelung prosecutors seized 50 Supermicro servers and detained three people. Nine were indicted in August, including an Nvidia Taiwan manager and two Supermicro Taiwan staff, eight of them charged with breach of trust and document forgery.

Taiwan's economy ministry promised earlier this year to amend the Foreign Trade Act again to tighten controls on AI chip exports to China. Amendment advocates want Beijing formally designated a controlled region, arguing current rules fall short of Taiwan's trade cooperation agreements with the U.S. — a gap this case may accelerate lawmakers' efforts to close.