By Joyce Huang | 2026-04-09

Taiwan is mulling tougher measures to counter China's illegal recruitment of high-tech talent, which could undermine the island's high-end chipmaking dominance and national security, according to two government officials in Taipei.

"Taiwan will continue to close legal loopholes .... imposing a stronger deterrent to China's infiltration of the tech sector," Carol Lin, a senior advisor to Taiwan's National Security Council (NSC), told Focus April 8 by phone.

Lin's comments follow the latest raid by Taiwan's Ministry of Justice Investigation Bureau (MJIB), in late March. In 10 days it targeted 11 Chinese companies suspected of setting up shell firms across the island to recruit Taiwanese engineers without Taipei's approval.

Such Chinese companies disguise their illegal operations in Taiwan by using Taiwanese, overseas Chinese or foreign-funded companies as fronts, sometimes in collaboration with local partners, the bureau said in a statement March 30.

Taiwan is home to Taiwan Semiconductor Manufacturing Co., the world's largest contract chipmaker and a key supplier to NVIDIA and Apple.

During the MJIB's coordinated raid between March 16 and 26, 185 agents searched 49 locations and questioned 90 suspects, the MJIB said.

Executives of shell firms colluding with China face up to three years in prison.

Still, penalties remain insufficient, said the anonymous MJIB investigator, referring to courts that grant "such white-collar criminals a lenient sentence of no more than six months." Some culprits stay out of jail by paying a fine of about $6,000 or an average of 1,000 TWD ($32) per day of confinement avoided.

The MJIB has handled more than 100 similar cases since late 2020, suggesting sustained Chinese recruitment.

Talent targeting expands

The March raid found that "almost 100 Taiwanese engineers, most of whom own expertise in integrated circuit design and [advanced] semiconductors," had been successfully recruited by these Chinese companies, a bureau investigator who requested anonymity because of the sensitivity of the case told Focus.

Beijing tries to recruit workers in a range of high-tech fields linked to the Taiwanese semiconductor ecosystem, says the MJIB.

Among the firms under investigation are several publicly listed Chinese companies, notably Shenzhen-based Anker Innovations, the world's second-largest mobile phone charging brand.

Also named is Shanghai-listed Huaqin Technology, the smartphone original design manufacturer with the world's largest market share. The company, previously investigated by Taiwanese authorities in 2021, faces fresh allegations of using shell companies to poach Taiwanese talent.

'Defection with a gun'

The MJIB is extremely concerned about "defection with a gun [sensitive knowledge]," when Taiwanese engineers take their skills and experience to China, the MJIB investigator said.

Beijing often expects new Taiwanese hires to disclose trade secrets or sensitive know-how to their employers in China, investigators say.

Even without outright leaks, some engineers save time and money for Chinese competitors by disclosing manufacturing dead ends that their former Taiwanese employers already had experienced, the MJIB employee added.

China is trying to bypass US chip and artificial intelligence restrictions by drawing on Taiwan's advanced technology and talent.

However, Taiwan has laws to prevent the leak of its most advanced technologies to China. The island, which China claims as its own territory, frequently breaks up networks of Chinese firms trying to poach semiconductor and high-tech talent.

A bigger list of critical technologies

To ward off the Chinese economic assault, Taiwan keeps expanding its list of protected "core and critical" technologies. They include semiconductors and artificial intelligence.

That list formerly had 22 items. In 2024, Taiwan expanded it to 32 items. It is considering a 42-item list now.

Violations may carry penalties of up to 12 years in prison or a fine of up to 100 million TWD ($3.1 million).

Taiwanese engineers who work remotely for those Chinese companies in the MJIB probe will bear no criminal liability.

Tougher penalties sought

But the NSC's Lin said that they may be liable for follow-up civil damages should their former employers in Taiwan find them leaking trade secrets to Chinese rivals or violating non-compete obligations.

In a report submitted to the Legislative Yuan on April 6, National Security Bureau Director Tsai Ming-yen said that these recruitment efforts are part of Beijing's "economic integration" strategy under its latest Five-Year Plan. Through talent recruitment, technology transfer and indirect channels, China aims to acquire advanced chipmaking and other critical technologies.