Taiwan raids Chinese companies over allegations of poaching chip engineers

Taiwan authorities raided ten Chinese semiconductor companies for illegal poaching of chip engineers and other tech talents as the chip war between Taipei and Beijing worsened. The raids were conducted in Taiwan’s capital Taipei and semiconductor hub, Hsinchu.

This is the second time in three months that such raids have been conducted by Taiwan authorities. Earlier, Taiwan Semiconductor Manufacturing Company Limited had raided eight Chinese companies for similar reasons in March, The Singapore Post reported.

The island’s Investigation Bureau said that they had raided 10 Chinese companies and over 70 were questioned in a joint crackdown across several cities including Taipei, Hsinchu, and Taoyuan.

According to the publication, the Taiwan bureau had raided the local unit of Giga Device Semiconductor (HK) Ltd on suspicion of illegal recruitment, Chinese backed firms including XEPIC Corporation.

The development has yet again brought a focus on China’s alleged attempts to steal Taiwan’s technology and skills in chip-making.

China, has made significant progress in the areas of assembling, testing, and packaging of electronics in the semiconductor industry, but lags in designing and manufacturing the semiconductor integrated circuits (“chips”) which require great technological sophistication to produce.

Recently, Chinese manufacturing companies have been recruiting talents from Taiwan with a salary of 2-2.5 times the average salaries and bonuses offered in Taipei, a new trick to lure the people from the island, according to a report.

Chinese officials are poaching talent in Hsinchu in Taiwan. It has also become the center of intellectual property theft, which often follows talent recruitment. Over 100 experienced engineers and managers from Taiwan Semiconductor manufacturing company (TSMC) have been transferred to foundries in China in 2019 and 2020. Overall, more than 3,000 engineers are estimated to have transferred from Taiwan to mainland companies, nearly 10 per cent of Taiwan’s semiconductor research and development workforce.

Realizing that China is poaching talent, the authorities are closely monitoring the Beijing companies as the latest crackdown on the firms to protect its chip supremacy.

The island’s role has been globally recognized in producing the crucial components, which are used in everything from smartphones to medical devices and cars.

With the onset of the pandemic, the demand for semiconductor manufacturing grew as the technology kept education and the professional world running, and economies including the US and Germany asked for Taiwan’s help in stepping up production. The war in Ukraine has also increased the value of semiconductors in the global economy so the contribution of Taiwan has increased manifold in manufacturing chips.

According to technical experts, the semiconductor manufacturing industry is the key factor in Taiwan’s rising stature that helps to distinguish the island from China. Such recognition is crucial for Taiwan as it has diplomatic ties with only 14 states. Many countries have still been hesitant to deal with Taipei because of fear of annoying Beijing which has repeatedly stated that the island must be reunited with the mainland, by force if necessary. 

One thought on “Taiwan raids Chinese companies over allegations of poaching chip engineers