TAIPEI (Taiwan News) — “Several Taiwanese companies that have been critical in building the chip sector in Taiwan” have been helping build facilities in China that have connections to Huawei, Bloomberg reported on Tuesday (Oct. 3).

The Taiwanese companies involved include the Chinese subsidiaries of Topco Scientific and L&K engineering, according to the report. “They are relatively small companies, but they have been integral to building what is the most powerful semiconductor industry in the world in Taiwan, and now they’re helping Huawei,” Bloomberg’s Peter Elstrom said on the media outlet’s TV channel.

“The chips from these plants built with Taiwanese companies’ help could eventually be used on Chinese missiles aimed at Taiwan,” said National Cheng Kung University Professor Li Jung-Shian (李忠憲).

The companies said they are helping with “parts of the facilities that are not strategically important,” and for this reason their work does not violate U.S. sanctions on China’s chip industry. Topco Scientific said it was working on wastewater systems for a chip plant.

A lawyer who had seen the results of the investigation said that much more information would be needed to know if the companies were violating U.S. sanctions.

The previously unreported Taiwanese presence in Huawei’s efforts risk triggering a backlash on an island that is preparing for polls next January, with the question of Taiwan’s rocky relationship with China a pivotal issue.

— Peter Elstrom (@pelstrom) October 3, 2023