The government of Taiwan declared on Saturday that Taiwanese semiconductor companies place 'great significance' on abiding by the law and that they will comply with new U.S. export regulations intended to hinder China's chip industry.

The rules for President Joe Biden's administration, which were unveiled on Friday, include a clause to cut off China from specific chips made anywhere in the world using American equipment, dramatically extending its reach in an effort to stop Beijing's technological and military gains.

The world's largest contract chipmaker and a significant supplier to companies like Apple Inc., Taiwan Semiconductor Manufacturing Co. (TSMC), is headquartered in this chip-producing nation.

In response to the American pronouncement, the Taiwanese economy ministry said that all enterprises operated legally.

The semiconductor industry in Taiwan has historically provided products to consumers worldwide and values legal compliance highly, according to the statement.

The ministry claims that the government keeps in touch with manufacturers on a regular basis and encourages them to invest in the growth of their factories and export their products to markets across the world for technological improvement.

The American laws were not discussed by TSMC because it was a quiet period before its quarterly releases the following week. The smaller rival United Microelectronics Corp. did the same before to the release of its earnings later this month.

Taiwan is concerned about China for its own reasons, particularly the efforts undertaken by Chinese companies to acquire technical know-how and semiconductor expertise. Chinese investment is subject to stringent limitations; China is Taiwan's largest trading partner.

As China conducts regular military drills close to the island in an effort to compel Taiwan into recognising Beijing's sovereignty, Taiwan's worries have intensified.