HSINCHU, Taiwan -- The head of a major Taiwanese contract chipmaking company told the Nikkei Asian Review on Thursday that if the authorities fail to prevent mainland China from stealing tech executives, Taiwan's world-beating electronics industry will be in jeopardy.
Yen Po-wen, CEO of United Microelectronics Corp., was speaking amid speculation that J.H. Shyu, one of his company's former senior vice presidents, is to work for a mainland rival after unexpectedly retiring at the end of February.
Shyu is a semiconductor industry veteran and longtime aide of Robert Tsao, UMC's founder and honorary chairman. He was in charge of UMC's first China investment, Hejian Technology, located in the southeastern city of Suzhou.
"China is boosting its chip industry relentlessly with government funds and a stock market that boasts of ultra-high price-earnings ratios," Yen told the Nikkei Asian Review outside a private briefing for President-elect Tsai Ing-wen by tech industry leaders.
"If Taiwan does nothing to attract foreign professionals while allowing China to lure our executives, the Taiwanese chip industry could face serious challenges," Yen said. He could not confirm whether Shyu has left Taiwan for the mainland, and UMC has already said it is not privy to his plans.
Shyu, meanwhile, told the Nikkei Asian Review that he is too busy for an interview. Responding through a secretary, he also made no comment on whether he has accepted an offer from China.
Chairman Tsai Ming-kai of MediaTek, Taiwan's biggest chip design company, echoed Yen's concerns over a possible brain drain. He told the Nikkei Asian Review that he is calling on Tsai Ing-wen to provide better tax incentives to both local and foreign executives if Taiwan is serious about remaining competitive.
Though the president-elect appeared sympathetic to industry concerns, her public comments were vague.
"We would help the industry cultivate new talent and hire foreign professionals to compete globally," she told reporters without elaboration.
China has been investing heavily and wooing Taiwanese executives and engineers to its growing chip industry, said Wang Yanhui, also known as Laoyao, the secretary general of Mobile Phone China Alliance and a longtime industry watcher.
"Whether Shyu agreed to work for a Chinese competitor or not, it would never be a single case," said Arisa Liu, an analyst at the Taiwan Institute of Economic Research. "It's a phenomenon that will go on."
In October, China's state-owned Tsinghua Unigroup hired Charles Kau, the former head of Inotera Memories, a joint venture between Micron Technology in the U.S. and Taiwan's Nanya Technology, as an executive vice president. The plan appears to be to build China's first memory chip facility from scratch.
Earlier last year, Steven Yuan, a former MediaTek vice president, was recruited to China's Spreadtrum Communications, his old company's main rival.