Why Taiwan is cracking down on Chinese companies

Taiwan authorities raided ten Chinese companies suspected of illegally poaching chip engineers and other tech talent this week, the island’s Investigation Bureau said on Thursday, the latest crackdown on Chinese firms to protect its chip supremacy.

Home to chipmaker giant TSMC and accounting for the majority of the world’s most advanced semiconductor manufacturing capacity, Taiwan has ramped up a campaign to counter illegal poaching by Chinese companies in what the island sees as a threat to its chip expertise.

The bureau said it raided 10 Chinese companies or their R&D centers which operate in Taiwan without approval earlier this week. It said nearly 70 people have been summoned for questioning in a joint crackdown across several cities including the capital Taipei and the island’s semiconductor hub, Hsinchu.

“The illegal poaching of Taiwan’s high-tech talent by Chinese companies has badly impacted our international competitiveness and endangered our national security,” the bureau said in a statement.

It said technology is vital to Taiwan’s security and urged people to “stay high on alert” for such Chinese activities.

The bureau did not name the companies currently being investigated, adding they included integrated circuit design firms and electronics parts makers.

China‘s Taiwan Affairs Office has not responded to Reuters’ requests for comment on the issue.

The Investigation Bureau has launched investigations into around 100 Chinese companies suspected of illegally poaching technology talents, a senior bureau official told Reuters last month.

China’s scramble for chip engineering talent has intensified amid Beijing’s goal of achieving self-reliance in advanced chips, especially after a trade war with the former Trump administration in the United States.

Taiwanese law prohibits Chinese investment in some parts of the semiconductor supply chain, including chip design, and requires reviews for other areas such as chip packaging, making it very difficult for Chinese chip companies to operate on the island legally.

In March, the bureau raided eight Chinese companies aimed at countering what it said was “the Chinese Communist Party’s illegal activities of talent-poaching and secret-stealing”.

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