Taiwan alleges China chipmaker SMIC illegally poached tech talent

Taiwan investigators on Friday alleged that Chinese chipmaker Semiconductor Manufacturing International Co. (SMIC) illegally recruited high-technology talent.

Taiwan’s Ministry of Justice Investigation Bureau (MIJB) said in a statement that SMIC had used a Samoa-based entity as cover to set up a subsidiary on the island “under the guise of foreign investment” and has been “actively recruiting” talent from Taiwan.

CNBC was unable to independently verify the claims and SMIC was not immediately available for comment.

The ministry said Taiwan began investigating the issue in December 2024. Eleven Chinese enterprises suspected of paoching talent were investigated, it said, with agents conducting searches at 34 locations and questioning 90 individuals.

SMIC is China’s biggest semiconductor manufacturing firm. It was thrust into the spotlight in 2023 when it was revealed to be the maker of the 7 nanometer chip in Huawei’s smartphone at the time. A few years prior, SMIC was put on a U.S. government export blacklist.

China has been trying to ramp up its chipmaking capabilities via SMIC, but the company remains behind competitors like TSMC in Taiwan. Chip export restrictions imposed by the U.S. also mean SMIC is unable to access the latest chipmaking tools from critical suppliers like ASML that could allow it to catch up.

Taiwan is a hotbed of talent in the semiconductor industry as it is home to TSMC, the world’s biggest and most advanced chipmaker. The U.S. has sought to tap into this talent, and bring more chipmaking capabilities to its shores, by convincing TSMC to build more manufacturing capacity in the country.

Taiwan’s MJIB said it set up a special task force at the end of 2020 to investigate allegations of “illegal poaching” of talent.

“Chinese enterprises often disguise their identities through various means, including setting up operations under the guise of Taiwanese, overseas Chinese, or foreign-invested companies, while in reality being backed by Chinese capital, establishing unauthorized business locations in Taiwan without government approval, and using employment agencies to falsely assign employees to Taiwanese firm,” the ministry said.