Taiwan’s Ministry of Justice Investigation Bureau (MJIB) has accused China’s largest chipmaker, Semiconductor Manufacturing International Corporation (SMIC), of illegally hiring Taiwanese semiconductor professionals.
The allegations form part of a broader investigation into 11 Chinese enterprises suspected of poaching talent from Taiwan’s chip sector.
The probe highlights rising tensions in the global semiconductor industry, where competition for engineering expertise has intensified following US restrictions on China’s access to advanced chipmaking equipment.
Investigators claim that SMIC secretly operated a subsidiary in Taiwan using a Samoa-based shell company to mask its origins and avoid regulatory oversight.
The operation allegedly targeted highly skilled engineers in an attempt to bolster China’s domestic chipmaking ambitions.
SMIC linked to shell firm in Taiwan
The MJIB said that SMIC created a subsidiary in Taiwan “under the guise of foreign investment,” using a company registered in Samoa as a front.
The firm is accused of recruiting local chip engineers while bypassing the legal requirements for foreign direct investment.
Taiwanese authorities began their investigation in December 2024.
Since then, law enforcement officials have searched 34 locations linked to the 11 Chinese firms and questioned 90 individuals connected to the suspected recruitment network.
A special task force was first established by the MJIB in late 2020 to track allegations of unauthorised hiring practices by mainland Chinese companies.
Authorities claim that Chinese firms often operate covertly, sometimes posing as Taiwanese, overseas Chinese, or foreign-backed enterprises to avoid detection and bypass Taiwanese legal restrictions.
In some cases, employment agencies have been used to funnel job offers to Taiwanese engineers.
US chip restrictions heighten race for talent
The investigation into SMIC comes amid escalating efforts by China to close its technology gap in chip production.
China’s ambition to achieve self-sufficiency in semiconductors has gained urgency since the US placed SMIC on its export blacklist in 2020.
This action effectively cut the company off from advanced chipmaking tools provided by companies like ASML, a key Dutch supplier of extreme ultraviolet lithography machines.
In 2023, SMIC made headlines when it was identified as the manufacturer of the 7-nanometre chip used in Huawei’s Mate 60 Pro smartphone.
The product raised concerns among US officials who questioned how the company had developed such a chip despite facing export bans on critical equipment.
SMIC has not publicly commented on the latest allegations made by Taiwan’s MJIB.
China faces chip talent restrictions
Taiwan continues to dominate the global semiconductor manufacturing industry.
The island is home to Taiwan Semiconductor Manufacturing Company (TSMC), the world’s most advanced contract chipmaker.
TSMC produces chips for tech giants such as Apple and Nvidia, and its technological edge has made Taiwan a strategic focal point in the global supply chain.
The US has moved to reinforce this strategic partnership, encouraging TSMC to expand its manufacturing capacity on American soil.
Washington has also been active in shielding Taiwan’s chip sector from Chinese recruitment and acquisition attempts, in a bid to secure supply chains and reduce dependency on Chinese tech.
The MJIB’s latest crackdown demonstrates Taiwan’s determination to protect its semiconductor workforce from what it calls “illegal poaching”.
The scale of the investigation, which involved 34 searches and 90 interviews, signals that authorities are escalating their efforts to counter foreign recruitment activities deemed harmful to national security and industrial competitiveness.
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