Taiwan facing tough battle to curb talent poaching by China for manufacturing computer chips

With China reportedly poaching talent from Taiwan in its bid to become self-reliant in manufacturing computer chips, Taipei faces a tough battle to stop its engineers from being lured to the mainland and stamp out illegal operations within its own territory.

On March 9, Taiwanese prosecutors had raided the offices of two compes who were alleged to have been funded by a chip design firm based in the Chinese mainland. The firm was suspected to have financial links to Bitmain technologies in Beijing, the world's largest manufacturer of cryptocurrency-mining equipment, reported South China Morning Post (SCMP).

"We suspect that the two compes - WiseCore Technology in New Taipei City and IC Link in Hsinchu - were set up by the Chinese company and that their top executives had in the past three years illegally recruited several hundred local engineers by paying them at least double their original salaries," said Chang Jui-chuan, a spokeswoman for the New Taipei District Prosecutors Office.

A total of 19 people from the two compes have been quizzed and bail was granted bail to four senior executives pending a further hearing.

Under Taiwanese law, mainland Chinese-funded compes are not allowed to invest in hi-tech and related businesses on the island, writes Lawrence Chung for SCMP.

These compes include MediaTek, MStar Semiconductor and Global Unichip Corp, according to local media.

With China-United States rivalry spilling over technology - Beijing has become increasingly determined to boost its self-reliance in critical industries, which has led to a spike in talent poaching from Taiwan, frequently in violation of local laws, say observers.

Lai Jui-lung, a lawmaker from Taiwan's ruling Democratic Progressive Party, said that this problem began when Beijing-friendly Ma Ying-jeou was elected the island's president in 2008.

"Ma lifted a ban on Chinese-invested compes operating retail businesses in Taiwan, and some of them used this as a cover to poach Taiwanese talent [in other fields]," he said, adding that the problem has worsened significantly in recent years.

Taiwan's National Security Bureau has set up a task force to deal with the illegal recruitment problem, according to SCMP.

"We have stepped up investigations into these illegal activities and possible leak of commercial secrets through such hiring," bureau chief Chen Ming-tong said in parliament on Thursday.

"...after countries like Japan and the US set restrictions in mainland China and refused to grant it licensing, Beijing had to resort to poaching talent," said Liu Meng-chun, director of the mainland Chinese division of the Taipei-based Chung-Hua Institution for Economic Research.

Liu also cited Richard Chang, a Taiwanese businessman known as the "father of the Chinese semiconductor", who was lured to mainland China to set up Semiconductor Manufacturing International Corporation.

( With inputs from ANI )