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Fears of talent poaching revived
BITMAIN PROBE: Prosecutors said the Chinese firm set up a new entity in China with a Taiwanese engineer as chairman, who recruited his former colleagues in Taiwan
An investigation into illegal talent poaching by Beijing-based Bitmain Technologies Ltd (比特大陸) has revived fears that Chinese companies would target Taiwan’s top engineers as their country works to build a world-class chipmaking industry.
Investigators on Tuesday descended on the offices of Bitmain’s two Taiwanese units — New Taipei City-based WiseCore Technology Co Ltd (智鈊科技) and Hsinchu-based IC Link Ltd (芯道互聯) — and interviewed 19 people in a probe into whether the cryptomining start-up had contravened the law, New Taipei District Prosecutors’ Office spokeswoman Chang Jui-chuan (張瑞娟) said.
The Chinese firm, which develops semiconductors for mining and other purposes, is suspected of illegally recruiting hundreds of engineers from Taiwanese firms over a period of three years.
Cryptocurrency mining computers are pictured at a Bitmain Technologies Ltd mining farm near Keflavik, Iceland, on June 4, 2016. Photo: Reuters
Taiwan prohibits firms from China from doing business or recruiting locally without prior approval, a measure intended to limit Beijing’s influence on Taiwan.
The accusations against Bitmain spur concerns that Chinese firms would accelerate efforts to hire Taiwan’s best engineers in a bid to achieve semiconductor self-sufficiency.
Beijing has pledged to develop its own advanced chip manufacturing to dominate future technologies and cut its dependence on US$300 billion of annual semiconductor imports.
Taiwan’s deep pool of expertise revolves around Taiwan Semiconductor Manufacturing Co (台積電), the world’s leading chip fabricator and a supplier to most US tech giants, from Apple Inc to Nvidia Corp.
US and European companies, such as Alphabet Inc’s Google and ASML Holding NV, have set up engineering hubs and research bases to tap local talent.
“China’s poaching of Taiwanese engineers undermines Taiwan’s semiconductor industry,” said Carol Lin (林志潔), a law professor at National Yang Ming Chiao Tung University in Hsinchu. “Through the maneuver, Chinese competitors can learn about Taiwanese companies’ progress. If these engineers bring trade secrets with them, Chinese rivals can have a firm grasp of Taiwan companies’ past success and failure in technological developments, and this could result in unfair competition and even endanger national security.”
Beijing has denied Washington’s claims that it demands technology or talent transfers, or targets the intellectual property of overseas firms.
Bitmain representatives did not respond to multiple requests for comment.
Bitmain’s actions are suspected of breaching the Act Governing Relations Between the People of the Taiwan Area and the Mainland Area (臺灣地區與大陸地區人民關係條例), Chang said.
An article in the act stipulates that for-profit Chinese firms cannot set up units in Taiwan and conduct business activities — including headhunting — without approval from local authorities, she added.
A separate news release from Chang’s office, while not identifying Bitmain by name, shed light on the allegations:
To develop artificial intelligence chips, the Chinese start-up created a new entity in China with a Taiwanese engineer as chairman. This engineer then recruited colleagues from his former company in Taiwan and formed a headhunting team to set up a research and development (R&D) center in Taiwan, the statement said.
Chang confirmed that the company in the news release was Bitmain.
The team offered potential recruits double their existing salaries and advertised openly on Taiwanese job sites, prosecutors said.
In 2018, IC Link recruited 200 R&D engineers from local IC design companies, such as MediaTek Inc (聯發科), MStar Semiconductor Inc (晨星半導體) and Global Unichip Corp (創意電子), by offering double the normal local salary equivalents — ranging from NT$7 million to NT$11 million (US$247,123 to US$388,336 at the current exchange rate) per annum, local media reports said.
DRAM maker Nanya Technology Corp (南亞科技) president Lee Pei-ing (李培瑛) in 2018 said that some of his engineers were being offered three to five times their salaries by Chinese competitors.
The typical practice was to first lure away a manager who would then go on to recruit more of his former colleagues, Lee said.
Prosecutors said that the chief executives of WiseCore, surnamed Yen (顏), and IC Link, surnamed Huang (黃), were freed yesterday on bail of NT$100,000 and NT$200,000 respectively.
The vice president of a joint venture set up by WiseCore and IC Link, surnamed Tsao (曹), was also freed on bail of NT$100,000, the prosecutors added.
Additional reporting by CNA
Published On: Wed, 10 Mar 2021 16:00:00 GMT