A major scandal is brewing in the tech world. Taiwan’s Ministry of Justice has launched an investigation into China’s largest chipmaker, SMIC. The company allegedly set up a shell company in Taiwan, posing as a Samoan firm, to recruit top tech talent. This move is seen as a way to circumvent US sanctions that have restricted SMIC’s access to advanced chip-making technology.
The probe, which started in December 2024, has already led to searches of 34 locations and interviews with 90 individuals. Taiwanese authorities are cracking down on Chinese companies that attempt to poach talent from the island’s thriving tech industry. SMIC is accused of using its shell company to lure engineers from Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest independent chipmaker.
TSMC is a prized asset for Taiwan, with its factories producing some of the world’s most advanced chips. The company is currently testing 2-nanometer chip production in its Kaohsiung factory. The US and Japan are also vying for TSMC’s attention, with the US trying to persuade the company to set up a factory in the States and Japan offering funding to build a plant.
The scandal has its roots in the US sanctions imposed on Huawei, which limited the Chinese tech giant’s access to advanced chips. Huawei was forced to rely on SMIC, which then faced its own sanctions. Despite these challenges, SMIC has continued to produce chips, including the Kirin 9000S used in Huawei’s Mate 60 Pro smartphone.
As the investigation unfolds, it’s clear that the tech world is becoming increasingly complex, with companies navigating a web of alliances, rivalries, and sanctions. One thing is certain: the battle for tech supremacy will only intensify in the years to come.
Sources: