Taiwan says China's SMIC suspected of illegally luring tech workers

TAIPEI, March 28 (Reuters) - Taiwan authorities said on Friday they were investigating whether China's largest chipmaker SMIC illegally lured Taiwanese tech workers under cover of a shell company on the island masquerading as Samoan.

Taiwan, which China claims as its own territory, has been stepping up efforts to stop what it considers illegal activities by Chinese firms to steal know-how and attract talent, often using fake companies as a cover, given the island's dominance in making advanced semiconductors.

In a statement, the investigation bureau of Taiwan's justice ministry said SMIC had set up a subsidiary in Taiwan posing as a firm from the Pacific state of Samoa to try and hire engineers.

It gave no details apart from saying the company operated in Hsinchu county, next to Hsinchu city, Taiwan's main semiconductor hub and headquarters of the world's largest contract chipmaker, TSMC.

SMIC, which has ramped up investment to expand production capacity and strengthen China's domestic semiconductor capability in the face of sweeping U.S. export controls, did not immediately respond to a request for comment.

The bureau said this month it had sent 180 people to raid 11 companies operating in Taiwan suspected of such illegal targeting of talent, including SMIC, searching 34 premises and interviewing 90 people.

Since 2020, when the bureau set up a task force on the matter, it has investigated more than 100 cases, it said.

"The high-tech industry is the lifeblood of our nation's economy, and companies with semiconductor technology and the related industrial chain are the 'mountains protecting the country' to maintain our economic strength," it said.

"Talents in the related industries have thus become the target of poaching by Chinese enterprises."

Many such companies trying to take Taiwanese engineers disguise themselves as Taiwan or foreign companies, illegally sending headhunters to work with Taiwan manpower firms or simply setting up underground offices, it said. (Reporting by Ben Blanchard; Editing by Clarence Fernandez)