Suspected of illegal poaching! Taiwan raids 8 Chinese chip companies

Latest update time：2022-03-10

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According to Nikkei Asia, on March 9, the local judicial agency Investigation Bureau of Taiwan launched a large-scale search of eight mainland chip and parts suppliers in Taipei, Taoyuan, Taichung and other cities , accusing them of illegally poaching Taiwanese employees. The bureau said that more than 60 people related to mainland Chinese companies were summoned for questioning .

(Source: Nikkei Asia)

The mainland Chinese companies under inspection include a rising chip design tool startup, Hefei-based Amedac , in which Synopsys holds a stake, and local offices of mainland China-listed chip development companies such as Vimicro and VeriSilicon , the report said .

The companies or R&D centers in Taiwan that were investigated this time involved industrial fields including electronic design automation (EDA) software design, third-generation semiconductor R&D and IC design, LCD driver IC design, digital multimedia IC design, image sensor CIS design, IC design customization one-stop service platform, communications and electrical and electromechanical equipment IC design, electric vehicle related components, etc.

The investigation comes as Taiwan faces severe worker shortages as the global chip industry rushes to expand production. To protect its critical chip industry, Taiwan is tightening laws to criminalize "economic espionage" or the use of key technologies and trade secrets outside its borders without approval.

23 investigations launched in one year

In fact, this is not Taiwan's first shot at mainland chip companies. The above-mentioned official said that the bureau launched 23 investigations involving mainland Chinese companies suspected of poaching Taiwanese talents in 2021, of which 19 cases were transferred to the procuratorate for further investigation.

In March 2021, the New Taipei District Prosecutor's Office in Taiwan launched an investigation into Bitcoin mining hardware manufacturer Bitmain 's human resources practices in the region. Prosecutors inspected seven offices of two locally registered companies with direct ties to Bitmain. The investigation focused on whether the companies violated the law by concealing their ties to mainland Chinese companies while poaching local talent in Taiwan's semiconductor industry.

Bitmain's holding company Jingshi Intelligence was reported by a local Taiwanese company, claiming that Jingshi Intelligence had cooperated with former R&D personnel of Taiwanese chip design companies through joint investment in new startups, and had privately established chip R&D companies "Intelligent New Materials" and "Core Road" in Taiwan, creating a poaching team.

After receiving the report, the local government of Taiwan searched Zhixin and Xindao companies respectively, and summoned the person in charge of Zhixin named Yan, the person in charge of Xindao named Huang and others as defendants, and ordered the two companies to pay insurance premiums ranging from NT$229 million to NT$45,800 respectively.

After investigation, the local government of Taiwan found that Bitmain's holding company Jingshi Intelligence established "Zhixin" and "Xindao" companies in Taiwan in 2017, but the establishment of the company was not approved, and it offered high salaries of more than 2 times the annual salary to poach local chip design talents in Taiwan to develop AI chips for Jingshi Intelligence. In the past three years, it poached more than 200 engineers from local companies such as MediaTek, ASE, and TSMC .

In July 2021, media reported that the Hsinchu District Prosecutor's Office in Taiwan officially filed a lawsuit against three senior executives of Tongfu Microelectronics on July 14 for violating the relevant provisions of Article 40 of the "Regulations Governing Cross-Strait Relations".

The Hsinchu District Prosecutor's Office pointed out that Tongfu Microelectronics had privately set up a research and development business center in Taiwan without the permission of the Taiwan government, poached high-tech talents for technology research and development, and illegally engaged in sales business activities in Taiwan, which had violated relevant laws and regulations. During the investigation, the prosecutors searched three premises, summoned a total of 15 suspects and witnesses, and seized the confidentiality agreement of the research and development business center, employee roster and other physical evidence.

Prohibit employees from working in mainland China

The talent shortage in the semiconductor industry continues to intensify. According to the latest survey recently released by Taiwan's 104 Job Bank, affected by the chip shortage, the semiconductor industry's labor gap averaged 34,000 people per month in the fourth quarter of 2021, a seven-year high, and the "supply-demand ratio" in the semiconductor industry was higher than the overall recruitment market.

(Source: 104 Job Bank)

In April 2021, in order to prevent the outflow of important technical talents to mainland China, Taiwan has notified human resource dispatch companies to remove all positions working in mainland China .

Taiwan authorities said all Taiwanese and foreign staffing companies on the island may no longer offer vacancies for positions in mainland China, especially those involving key industries such as integrated circuits and semiconductors, Nikkei Asian Review has learned.

"As China's semiconductor development has suffered some setbacks due to geopolitical tensions between China and the United States, China has become more active in seeking out top chip talent in Taiwan to help build a self-sufficient supply chain," the department said.

The department’s notice prohibits recruitment platforms and headhunters from helping or representing any company to hire individuals to work in mainland China, and violators will be fined by government departments. The notice also mentioned: “If the recruitment involves semiconductors and integrated circuits, the fine will be higher.”

Later, 104 Job Bank, Taiwan's largest recruitment platform, told customers in a letter, "Please close your job vacancies in mainland China as soon as possible to avoid violating the law."

(Source: Nikkei Asia)

Not only that, at the end of last year, Taiwan regulators were said to be about to issue new regulations to prevent local technology companies from selling their subsidiaries or other assets in mainland China . This is the latest move by the local government to prevent sensitive technologies such as semiconductors from being leaked to mainland China.

The chip industry's war for talent

In recent years, "black swan" events have occurred frequently, and the global chip crisis has made countries realize the importance of the chip industry. Countries including the United States, Japan, South Korea, and Europe have introduced measures to encourage chip manufacturing.

my country is also continuously introducing relevant policies to support the development of the integrated circuit industry from local to national levels. As of December 1, 2021, the number of domestic chip design companies has increased by 592 from 2,218 in 2020 to 2,810, a year-on-year increase of 26.7%. At the same time, the total investment in the chip industry in 2021 is expected to reach 150 billion yuan.

This technology-intensive industry is even more eager for talent. According to the "2022 Talent Market Insights and Salary Guide" report released by human resources service company Career International, the main talent gaps and popular positions in key areas of the chip field include: IC design engineers, EDA software development engineers, semiconductor model development, digital verification engineers, FPGA experts, and wafer packaging engineers.

The demand for talent is unprecedented, and the training cycle for chip talent itself is relatively long, so the war for talent may intensify.

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This article is compiled by Xin Shiye from Nikkei Asia, ChinaVenture, Strait Herald, United Daily News, etc. The content is for communication and learning purposes only. If you have any questions, please contact us at info@gsi24.com.

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