According to Reuters on May 26, Taiwan raided 10 Chinese companies last week for allegedly poaching chip engineers and high-tech talents. The crackdown is the latest effort to protect the island’s global chip supremacy.
The Taiwan Ministry of Justice Investigation Bureau stated, [quote] “The illegal poaching of Taiwan’s high-tech talent by Chinese companies has severely impacted our international competitiveness and endangered our national security.” [end quote]
Taiwan authorities raided the research and development centers of 10 Chinese firms in four cities across the island, including Hsinchu, the chip industry’s capital.
The bureau added that it summoned over 70 related people and searched 20 facilities. These Chinese firms are accused of illegal operations on the island.
Since last year, Taiwan has prosecuted seven people and raided 27 facilities involving alleged poaching of its semiconductor talents.
Reuters reported that Taiwan laws do not allow investments from mainland China in some processes of the semiconductor supply chain, like chip design. The law requires critical investment reviews in chip packaging, making it very hard for Chinese chip companies to operate in Taiwan legally.
In recent years, the Chinese regime has pushed up its ambition to achieve global chip dominance as a part of its Made in China 2025 plan.
To help the chip industry, in 2014, the communist regime established a National Semiconductor Fund of 22 billion dollars. Another 33 billion dollar investment was announced in 2019.
In addition, China often offers high salaries and compensations, three times higher than in Taiwan, to attract chip talents to work for China chip makers.
According to a Taiwan’s Mainland Affairs Council study, Taiwan lost about 3,000 chip engineers, about 10% of the island’s chip industry talents, to China.
Taiwan chip companies dominate the global chip industry. Taiwan Semiconductor Manufacturing Company (TSMC) is the world’s largest chipmaker, and the company makes over half of the semiconductors manufacturing capacity of the world.