TAIPEI, June 9 -- The most important supply chain in the world runs through an island that China claims and the United States arms, and Washington wants Taipei to use it as a weapon. Taiwan is now considering doing exactly that, weighing tighter controls on the AI chips it sells to China in order to fall further into line with the export regime the United States has built to keep Beijing out of the technology's front rank.

The idea, which surfaced this week, would give Taiwanese authorities more legal tools to stop advanced hardware, the AI servers and Nvidia processors that train the largest models, from being diverted to China. Such sales are already barred under American rules unless Washington signs off, restrictions the United State...