- Chinese companies have reportedly hidden their ownership to operate in Taiwan
- They’re also poaching Taiwanese workers, paying them up to 10x more
- China is fighting back against US restrictions, but Taiwan wants to protect its own industry
Taiwan has reportedly increased the pressure on Chinese technology companies that are hiding their Chinese ownership as it tried to protect its own semiconductor business.
The country’s Ministry of Justice Investigation Bureau (MJIB) has reportedly investigated 166 cases involving suspected illegal Chinese ownership since 2020, resulting in 36 convictions – 33 of which involved in semiconductor research, development or design.
While Taiwanese law doesn’t prohibit Chinese companies from operating in Taiwan, they must seek government approval under the Cross-Strait Act, but by obscuring their Chinese ownership they’ve been looking to circumvent those restrictions.
Chinese companies targeted for operating illegally in Taiwan
Rest of Worldreports many of the Chinese firms in question established shell companies in third countries or used non-Chinese nationals to register their businesses, making them appear either Taiwanese or generally non-Chinese.
The news comes against a backdrop of heightened geopolitics – China has been investing heavily in growing its semiconductor self-sufficiency amid ongoing US restrictions, and have reportedly been poaching Taiwanese engineers with salaries up to 10x higher than average.
Taiwan itself is said to account for more than 60% of global semiconductor production, producing around nine in 10 of the world’s most advanced processors, so alleged Chinese poaching is especially noteworthy. “Taiwan’s high-tech talent has become a key target for recruitment by Chinese enterprises,” the MJIB wrote.
In a separate case, the MJIB has also investigated 67 cases involving Chinese companies suspected of stealing Taiwanese trade secrets.
Interestingly, the cases don’t just relate to smaller start-ups – Xiaomi, OnePlus, Oppo and Semiconductor Manufacturing International Corporation (SMIC) were all named in the report.
Fines reported in the cases ranged from around $3,800 to $800,000, with penalties of up to three years’ imprisonment also cited.
