A growing diplomatic rift between South Africa and Taiwan is sparking concern across the tech and AI sectors, with experts warning that potential chip export restrictions could stall digital innovation, data center operations, and economic growth.

Taiwan’s Ministry of Foreign Affairs says it is weighing curbs on semiconductor exports in response to what it calls South Africa’s “crude” downgrade of its diplomatic mission — a move linked to Pretoria’s firm adherence to the “One China” policy.

While South Africa is not currently a major buyer of Taiwanese chips, industry leaders caution that Taiwan’s dominance in cutting-edge semiconductor manufacturing gives the potential restriction outsized influence.