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China's Semiconductor Manufacturing International Corporation (SMIC) is being investigated by Taiwan for poaching engineers and other talent from the island. SMIC is China's primary chip manufacturer and is at the center of the country's efforts to establish a domestic chip supply chain. However, US sanctions have stripped SMUC of its ability to procure advanced chip manufacturing machines capable of efficiently manufacturing chips below the 7-nanometer node. Previous reports have indicated that China, particularly Huawei, has stepped up efforts to recruit engineers and others from the Netherlands, which houses chip manufacturing equipment maker ASML.
SMIC, Other Chinese Companies Investigated By Taiwan For Poaching Tech Talent For Chip Manufacturing
US restrictions that prevent SMIC from acquiring EUV and advanced chip machines have hampered the company's ability to manufacture advanced chips. While some media reports have claimed that SMIC is working with Chinese firms to develop indigenous EUV machines, such machines are likely to enter volume and mass production at a time when more advanced equipment is being used by Western chip manufacturers and Taiwan's TSMC.
In a statement, Taiwan's Investigation Bureau shared earlier today that it had stepped up efforts to counter attempts by SMIC and other Chinese companies to recruit Taiwanese talent for Chinese chip manufacturing. According to authorities, SMIC set up an entity in Taiwan as a Samoa-based company to purportedly deceive local authorities and hire talent for China.
Crucially, according to the Taiwanese authorities, the SMIC entity was located in the island's technology hub, Hsinchu. Hsinchu houses TSMC's headquarters and advanced chip manufacturing facilities, indicating that poaching engineers from the world's leading and largest contract chip manufacturer was a priority for the Chinese chip manufacturer.
In total, Taiwanese authorities have raided 11 companies in March as part of an operation covering 34 locations and interviewing 90 people. "Talents in the related industries have thus become the target of poaching by Chinese enterprises," said the Bureau, adding that it has looked at 100 similar cases since 2020.
A Chinese government document from last year suggested that the country's attempts at developing indigenous chip manufacturing machines were at least 15 years behind the West. Apart from TSMC, Huawei has also purportedly stepped up efforts to poach employees from lens manufacturer Carl Zeiss. Zeiss' lenses are one-of-a-kind and are indispensable in building advanced chip manufacturing machines.
While SMIC is capable of manufacturing 7-nanometer chips, a lack of access to EUV machines means that the firm is struggling to refine the manufacturing process. As a result, the chips that it manufactures have low yields, which is an industry term for the number of usable chips per silicon wafer.
