Spy catchers in Taiwan have launched multiple probes into around 100 Chinese companies suspected of illegally poaching semiconductor engineers and other tech talent, said a senior official from Taiwan’s Investigation Bureau.
Home to tech giant including TSMC, Taiwan accounts for 92% of the world’s most advanced semiconductor manufacturing capacity.
Chinese President Xi Jinping is forcefully supporting China’s goal of achieving self-reliance in advanced chips, intensifying the scramble for engineering talent.
In December 2020, Taiwan responded to the Chinese move by creating a task force within the justice ministry’s Investigation Bureau with the main aim of tackling the poaching of chip engineers.
Its raids represent just “the tip of the iceberg”, said officials on the condition of anonymity, since they do not want cases to be impeded.
The Investigation Bureau said the official’s comments represented its views.
Increasing belligerent Chinese military pressure to accept its sovereignty has only strengthened Taipei’s determination to protect its chip supremacy – a strategic asset.
In March 2022, the bureau conducted a raid on eight companies aimed at countering “the Chinese Communist Party’s illegal activities of talent-poaching and secret-stealing” – its biggest operation to date.
While it is not illegal Chinese firms to hire Taiwanese engineers, Taipei has prohibited Chinese investment in some parts of the semiconductor supply chain including chip design and requires reviews for other areas including chip packaging, making it very difficult for Chinese chip firms to operate on the island legally.
As per a case currently under investigation, a firm which supposedly is a Taiwanese data analysis company, is sending chip design blueprints to China. In mid-March, following nearly a year of surveillance, the bureau summoned the firm’s owner for questioning. Since then the owner has been released on bail, said officials and declined to identify the company since it has yet to be formally charged.
Chinese companies also employ other tricks including incorporating units in tax havens such as the Cayman Islands, making it harder trace inflows from China.
Beijing-based Starblaze Technology, an integrated circuit (IC) design house, has been accused of running an R&D centre in the tech hub of Hsinchu without approval.
It allegedly conducted job interviews via Zoom and used a Hong Kong company to handle payroll and insurance, according to court documents. The trial is ongoing.
Tongfu Microelectronics, a Chinese state-affiliated company, was accused of having an illegal office whose employees received salaries in U.S. dollars in offshore accounts wired via a Hong Kong-based subsidiary. The defendants were found guilty in January.
In 2021, Chinese chip companies offered salaries two to three times local levels, with the most sought-after employees being IC designers, who can work remotely.
Those willing to be poached risk not finding work again at Taiwanese tech companies as well as public shaming. Several senior TSMC executives who went to work for SMIC in China have been branded as traitors in Taiwanese press.
The Taiwanese government has also proposed making the leaking of core chip technologies a breach of national security law.
($1 = 28.6090 Taiwan dollars)