A growing diplomatic spat between South Africa and Taiwan – because of Pretoria’s stance that the East Asian country is part of China – is threatening to block access to the semiconductors that power advanced technologies, such as robotics and artificial intelligence (AI).
Taiwan’s ministry of foreign affairs (MOFA) recently said it was considering export restrictions in response to what it called a “crude” downgrade of its diplomatic presence in South Africa.
MOFA director-general Philippe Yen said the details of any measure are not yet finalised and Taiwan is not currently a major chip supplier to SA, despite its dominance in global semiconductor production.
Professor Japie Greeff, research coordinator at Belgium Campus iTversity, says robotics and other emerging technologies depend heavily on advanced chipsets manufactured in Taiwan. “Any disruption could severely impact innovation, costs and deployment globally.”
Greeff stresses that although alternative suppliers exist, Taiwan dominates cutting-edge chip manufacturing.
“Many of the data centres in Africa are powered by the chips created in Taiwan, leading to a direct impact on our adoption of emerging technologies, hosted within these data centres, like agentic AI capabilities.”
According to UN Comtrade, South Africa imported $491 254 worth of electronic integrated circuits and micro assemblies last year – around R8.8 million at Monday’s exchange rate of R18.01.
Caution required
Dr Ernst van Biljon, head lecturer and programme coordinator MCom in supply chain management at IMM Graduate School, says Taiwan’s consideration of export restrictions is a “serious red flag”.
He says the local impact would be sweeping. “Semiconductors are essential to everything from telecommunications and industrial automation, to smart devices and data infrastructure.
“A restriction would constrain SA’s innovation cycle, delay hardware rollouts, increase costs for tech and manufacturing sectors, and slow digitalisation in both the public and private sectors.”
Dr Jannie Zaaiman, CEO of the South Africa ICT Association, believes the restriction is “unlikely to cause immediate disruption” but says over the longer term, it could block SA’s access to technologies needed for AI development, 5G infrastructure and high-performance computing.
IDC South Africa MD Mark Walker notes the effect will vary by sector, with PC manufacturers relying on semi-knock-down and fully-assembled devices likely to be hardest hit.
Industry veteran Adrian Schofield agrees. “However, we should be wary of any escalation that leads to a blockade by manufacturers who use those chips.”
Nicole Orr, Mustek chief marketing officer, says it is still too early to assess the situation. “We have not received any communication from our vendors, so currently the impact is purely speculative.”
Diplomatic tensions
Van Biljon adds that Taiwan’s move “underscores how geopolitical shifts can abruptly disrupt technology supply chains that underpin critical national infrastructure and the broader ICT ecosystem”.
Taiwan’s Yen said the export restriction would “safeguard national sovereignty and dignity” as he responded to SA’s downgrade of Taiwan’s mission.
South Africa cut formal diplomatic ties with Taiwan in 1997 due to its one China policy, which recently announced zero tariffs for African exports. The Department of International Relations and Cooperation ordered Taiwan to relocate its office from Pretoria to Johannesburg in December 2023, later confirming it would be rebranded as a Trade Office.
The Brenthurst Foundation called the diplomatic downgrade “a cheap and silly tactical manoeuvre for a misplaced strategic goal,” arguing in February that it was “not in South Africa’s interests”.
Local capacity
The issue highlights the urgent need to diversify suppliers and invest in local skills, says Greeff. “There is an opportunity for Africa to gather the materials and develop the skills needed to compete in this market; however, the exercise comes with a hefty price tag.”
While SA has some limited semiconductor research and assembly activity, “it does not have the capacity to fabricate chips at the scale or quality needed for commercial or industrial use,” Van Biljon adds.
Greeff comments that “any limitation in open trade is obviously something we would prefer not to have happen, as it is a barrier to growth and economic prosperity. It would be very useful to re-invigorate this capability again, however, for exactly these sorts of reasons.”
The Democratic Alliance (DA) has criticised government for putting critical technology at risk.
DA MP Ryan Smith says: “Taiwanese semiconductor chips are crucial components in the production of any modern electronic device… The local automotive industry, for example, is dependent on these chips to account for approximately R300 billion in annual automotive exports… creating tens of thousands of local jobs.”
Smith points out that “future economic growth requires access to semiconductor chips”. He urges Pretoria “to negotiate with the Taiwanese government to secure this critical technology for which there is no substitute”.
Zaaiman adds that maintaining “a balanced and pragmatic approach to international relations” could help secure SA’s place in global technology supply chains.
Share