Geopolitics and Legal Risks – Legal Framework of the National Core Key Technologies (Taiwan)

February 2024

Aaron Chen and Sean Tang

I. Introduction

The regulations for the protection of the national core key technologies (hereinafter referred to as “key technologies“) officially came into effect in the first half of 2023.[1]

Looking at the regulations for the protection of key technologies, it can be broadly divided into two aspects: “technology protection” and “talent control.” The former, as set forth in Article 3 of the National Security Act (hereinafter referred to as the “NSA“), which defines infringement of key technologies trade secrets, and Article 8, which provides for criminal liability for such infringement, establishes a multi-layered trade secret protection system. The latter, through provisions in Article 9 and Article 91 of the Act Governing Relations between the People of the Taiwan Area and the Mainland Area, restricts members of institutions or industries that receive government funding to certain standards when engaging in business related to key technologies from going to the mainland China.

The recognition of key technologies is crucial in compliance with the aforementioned regulations by industries. The National Science and Technology Council officially announced the “Regulation for the Recognition of National Core Key Technologies” (hereinafter referred to as the ” Regulation for the Recognition“)[2] on April 26, 2023, and the Executive Yuan recently released the first batch of the national core key technologies list (hereinafter referred to as the “key technologies list“) (as detailed below). The second batch of list is expected to be release around March of 2024, which is worthwhile to be closely observed.

II. Progress: The Executive Yuan announced the first batch of the key technologies list on December 5, 2023

The Key Technologies Review Council concluded its deliberations on November 14, 2023, followed by the Executive Yuan’s announcement of the first batch of the key technologies list on December 5, 2023. This key technologies list encompasses 5 major fields: national defense technology, space technology, agriculture, semiconductor, and information and communication security, comprising a total of 22 technology items. In the space technology field, 8 items are included, making it the most represented.[3] As for the semiconductor field, the list includes technologies related to IC manufacturing processes of 14 nm and below, along with critical gases, chemicals, and equipment technologies. Additionally, heterogeneous integration and packaging technologies such as wafer-level packaging technology, silicon photonics integration and packaging technology, and associated essential materials and equipment technologies are also covered.

According to National Science and Technology Council, this key technologies list focuses on technologies with dominant advantages and urgent protection needs. For example, in the eye-catching semiconductor industry, IC manufacturing with a process of less than 14nm is included in the key technologies list because semiconductor industry in Taiwan has the largest market share in the world and is highly connected to the development of related industrial chains, which has a high impact on the economic development and industrial competitiveness of Taiwan.

III. Industries shall be mindful of regulations related to the NSA and the Act Governing Relations between the People of the Taiwan Area and the Mainland Area, and closely pay attention to the subsequent revision of the key technologies list

This key technologies list will not impact the existing lawful technology exchanges and business activities of relevant industries. However, in the event of infringement of key technologies trade secrets as defined in Article 3, paragraphs 1 and 2, of the NSA, penalties will be intensified. On the other hand, in accordance with the “Regulation for the Recognition for Government Agencies (Institutions) Commissioning, Subsidizing, or Investing in National Core Key Technology Projects”, government agencies (institutions) commissioning, subsidizing, or investing in key technologies projects shall, within three months of the announcement of this list, conduct an inventory and review to identify personnel involved in key technologies projects, and notify the Ministry of the Interior National Immigration Agency and the parties involved. In the future, such personnel seeking to travel to mainland China must apply for permission in advance and obtain approval before doing so.

It should be noted that the National Science Council and relevant ministries will continue to review the contents of the key technologies list in accordance with changes in technological development. It is expected that the second batch of list might be released in around March of 2024. Industries are reminded to regularly pay attention to the relevant announcements. Furthermore, industries involved in the technologies listed in the key technologies list are required to establish effective internal measures to monitor and protect the key technologies trade secrets, and enhance the intellectual property management systems to ensure legal compliance.

[1] For detailed introduction, please refer to the Firm’s Newsletter:Partial Amendments to the Act Governing the Relations Between the People of the Taiwan Area and the Mainland Area via Presidential Directive (Taiwan), Draft Regulations Related to the Determination of National Core Key Technologies Pre-announced by the NSTC of Taiwan.
[2] For detailed introduction, please refer to the Firm’s Newsletter:Formal Implementation of the Legal Regime for National Core Key Technologies (Taiwan)
[3] Space technology field includes: satellite control technology, space-grade X-Band image download technology, space-grade image compression Electronic Unit (EU) technology, space-grade CMOS image sensor technology, design, manufacturing, and integration technology for space-grade optical payload systems, space-grade active phased array antenna technology, space-grade passive reflector antenna technology, and space-grade radar image processing technology.

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