The island nation has warned of a potential blow to semiconductor production due to recent U.S. moves to reduce dependence on Taiwan’s advanced technology in this area, Bloomberg writes.

The recently passed semiconductor law in the U.S., along with a similar proposal in Europe, “could directly or indirectly affect Taiwan’s exports of critical industries,” according to an industry statement.

“The uncertainty will affect Taiwan’s semiconductor production and exports, although the extent of the impact is still unclear.”

The nearly $50 billion Microchips and Science Act, passed by the U.S. government in August to spur domestic semiconductor research and development, illustrates the Biden administration’s attempts to reduce reliance on foreign suppliers, including Taiwan.

Taiwan’s wiring supply chain, represented by Taiwan Semiconductor Manufacturing Co. leads the market, and TSMC is also building a chip factory in the United States. But the U.S. itself is also seeking to become an advanced power in chip manufacturing to counter Beijing.

Taiwan has proposed extending some tax incentives for companies that invest in local technology research and manufacturing in an effort to bolster its semiconductor industry.

The signing of the Microchip Act has already spurred U.S. chip companies such as Micron Technology Inc (NASDAQ:MU) to plan billions of dollars worth of new investments. U.S. Commerce Secretary Gina Raimondo also recently pointed to the need to shift advanced chip production from Taiwan to the U.S.

The U.S. recently unveiled sweeping restrictions on the sale of semiconductors and chip manufacturing equipment to the second world economy.