Intel And Microsoft Staff Allegedly Lured To Work For Fake Chinese Company In Taiwan

Chinese tech companies created entities in Taiwan and disguised them so they had no connections to China, so they could lure top tech talent to work on significant projects.

So says the Investigation Bureau of Taiwan’s Department of Justice, which last Friday published an outline of a years-long probe into attempts to poach Taiwanese talent in defiance of laws that restrict investments and hiring by Chinese companies.

The Investigation Bureau alleges China gets around those measures by setting up companies that go to considerable lengths to hide their connection to the Middle Kingdom.

One of those companies is apparently called Yunhe Zhiwang (Shanghai) Technology Co., Ltd and develops high-end network chips. The Bureau claims its chips are used in China’s “Data East, Compute West” strategy that, as we reported when it was announced in 2022, calls for five million racks full of kit to be moved from China’s big cities in the east to new datacenters located near renewable energy sources in country’s west. Datacenters in China’s east will be used for latency-sensitive applications, while heavy lifting takes place in the west.

Staff from Intel and Microsoft were apparently lured to work for Yunhe Zhiwang, which disguised its true ownership by working through a Singaporean company.

The Investigation Bureau also alleged that China’s largest chipmaker, Semiconductor Manufacturing International Corporation (SMIC), used a Samoan company to establish a presence in Taiwan and then hired local talent. That’s a concerning scenario as SMIC is on the USA’s “entity list” of organizations felt to represent a national security risk. The US gets tetchy when its friends and allies work with companies on the entity list.

• TSMC's US builds won't make America great at chips again, says ex-Intel boss Gelsinger
• TSMC pauses production after strong earthquake hits Taiwan
• Taiwan reportedly claims China-linked ship damaged one of its submarine cables
• China claims Taiwan, not civilians, behind web vandalism

A third Chinese entity, Shenzhen Tongrui Microelectronics Technology, disguised itself so well Taiwan’s Ministry of Industry and Information Technology lauded it as an important innovator and growth company.

As a result of the Bureau’s work, prosecutors’ offices in seven Taiwanese cities are now looking into 11 Chinese companies thought to have hidden their ties to Beijing.

This matters to Taiwan because its digital technology industries –especially chipmaking and semiconductor design – are big contributors to its economy. If local talent are working to improve China’s capabilities, it’s possible Taiwanese industry will be eclipsed. Worse still, tech developed in Taiwan could be used to help China execute its plans to re-unite with the island – a goal Chinese leader Xi Jinping says is proper and inevitable, but which the Taiwanese people mostly oppose. ®