'Tip of the iceberg': Taiwan's spy catchers hunt Chinese poachers of chip talent

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By Yimou Lee and Sarah Wu

TAIPEI, April 8 (Reuters) - Taiwan's spy catchers have launched probes into around 100 Chinese companies suspected of illegally poaching semiconductor engineers and other tech talent, a senior official at the island's Investigation Bureau told Reuters.

That comes on top of seven prosecuted since the start of last year and includes 27 which have either been raided or whose owners have been summoned for questioning by the bureau, the official said.

Home to industry giant TSMC and accounting for 92% of the world's most advanced semiconductor manufacturing capacity, Taiwan possesses what China needs - chip expertise in spades.

A global chip shortage and Beijing's avowed goal of achieving self-reliance in advanced chips - more forcefully promoted by Chinese President Xi Jinping after a trade war with the former Trump administration - has only intensified the scramble for engineering talent.

Taiwan responded with the creation in December 2020 of a task force within the justice ministry's Investigation Bureau - its main spy catching organisation - to tackle poaching.

Cases where it has taken action with raids or questioning represented "the tip of the iceberg", the official said, asking to remain anonymous so that investigations are not impeded.

The Investigation Bureau said the official's comments represented its views.

Heightened military pressure from China, which claims Taiwan as its territory, has only strengthened Taipei's determination to protect its chip supremacy - an asset also strategically important to the United States as much of its chip manufacturing is outsourced to the island.

Last month the bureau conducted its biggest operation to date - a raid of eight companies aimed at countering what it said was "the Chinese Communist Party's illegal activities of talent-poaching and secret-stealing".

China's Taiwan Affairs Office did not respond to a Reuters request for comment.

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It is not illegal per se for Chinese firms to hire Taiwanese engineers. Taiwanese law, however, prohibits Chinese investment in some parts of the semiconductor supply chain including chip design and requires reviews for other areas such as chip packaging, making it very difficult for Chinese chip firms to operate on the island legally.

Taiwanese engineers are also free to go to China, but many prefer the quality of life on the island, especially while COVID-19 restrictions make travel harder.

One case under investigation involves a firm that purports to be a Taiwanese data analysis company but which authorities believe is an arm of a Shanghai-based chip firm sending chip design blueprints to China, according to the official and another colleague who spoke with Reuters.