China’s SMIC Under Investigation by Taiwan for Allegedly Poaching Chip Engineers from TSMC's Hometown
Taiwanese authorities have launched an investigation into China's Semiconductor Manufacturing International Corporation (SMIC) amid allegations of illegally recruiting semiconductor engineers and other skilled personnel from Taiwan, particularly from Hsinchu—home to Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chip manufacturer.
According to a report from Bloomberg, Taiwan's Investigation Bureau intensified its operations this month, probing attempts by SMIC and other Chinese firms to recruit Taiwanese technology talent. Taiwan accuses SMIC of establishing an entity in Hsinchu disguised as a Samoa-based company to covertly attract local talent for chip manufacturing in mainland China.
SMIC is central to China's ambitions to build a self-sufficient semiconductor supply chain but faces significant setbacks due to U.S. sanctions, notably restrictions on acquiring advanced chip manufacturing equipment capable of efficiently producing sub-7-nanometer chips. Such sanctions have severely limited SMIC's technological progression compared to global rivals such as TSMC.
In March, the Taiwanese authorities conducted raids on 11 companies as part of an extensive investigation spanning 34 locations and involving interviews with 90 individuals. The Investigation Bureau emphasized, "Talents in the related industries have thus become the target of poaching by Chinese enterprises," noting the agency has investigated around 100 similar cases since 2020.
This investigation is part of a broader crackdown on unauthorized activities by Chinese tech companies operating in Taiwan, according to a report from Nikkei Asia.
This development aligns with previous concerns of Chinese entities, including Huawei, intensifying their efforts to acquire critical semiconductor expertise internationally, such as recruiting engineers from ASML in the Netherlands and lens specialists from Germany's Carl Zeiss—companies essential to advanced chip manufacturing processes.
Despite claims that SMIC can manufacture chips at the 7-nanometer level, without access to extreme ultraviolet (EUV) lithography equipment, the company's yields—usable chips per silicon wafer—remain critically low. Earlier Chinese government assessments indicated that China's domestic chip manufacturing technology is roughly 15 years behind Western counterparts, underscoring the urgency behind their global recruitment initiatives.
What's your take on the ongoing semiconductor talent competition between China and Taiwan? Share your perspective in the comments.
