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Facing a brain drain, Taiwan must recruit chip experts abroad

China is luring industry workers with lucrative packages

Burn J. Lin, TSMC's former vice president of research and development, says Taiwan needs to recruit talent from China and other countries. (Photo by Cheng Ting-fang)

HSINCHU, Taiwan -- A former executive of Taiwan Semiconductor Manufacturing Co., the world's largest contract chip maker, says the island could suffer a brain drain and its export-reliant economy could be undermined unless the industry does something to prevent the talent outflow.

Burn J. Lin, former TSMC vice president of research and development, says he is worried that Taiwan may lose more semiconductor experts to China in a Jan. 20 interview with Nikkei Asian Review.

Taiwan's semiconductor industry is the jewel in the crown of the export-reliant economy. It is the second largest in the world by revenue, trailing only the U.S.

"China is aggressively attracting Taiwanese professionals and other foreign talents, while Taiwanese companies have difficulties hiring Chinese technical experts faced with numerous regulatory restrictions," Lin said.

Lin is a distinguished research chair professor at National Tsing Hua University in the northern Taiwanese city of Hsinchu, home to many leading tech companies including TSMC.

A Taiwanese chip industry executive, who has been approached by China, echoed Lin's sentiment. He said over the next two years, more and more senior Taiwanese executives will be taking offers from Chinese companies, lured by lucrative packages. He said that he did not take up the offer made to him due family and health reasons.

China has been trying to create its own chip industry to reduce heavy reliance on foreign imports mostly from Qualcomm, Intel, MediaTek, TSMC, and Samsung Electronics.

Chips serve as the brain of gadgets. They are one of the most crucial and expensive components in electronics devices including computers and smartphones.

For now, Taiwanese companies can only hire Chinese staff if they cannot find any suitable candidate locally. Chinese nationals working in Taiwan have to renew their work visas once a year.

"In such an environment, China can gain more expertise while Taiwan will fall behind. The solution is to open Taiwan up more and welcome specialists from China just as specialists from other countries," Lin said.

He also voiced concerns that fewer Taiwanese students are interested in obtaining doctoral degrees or working in the engineering or semiconductor sector.

Lin is the inventor of immersion lithography, a groundbreaking technology that has helped the world's leading semiconductor companies such as Intel, TSMC, and Samsung to make chips in the most cost-effective way over the past decade.

"National power"

Chief Executive Yen Po-Wen of United Microelectronics, the world's No.3 contract chipmaker, has also been feeling the heat from China's aggressive moves.

"We do see China as a talent magnet as it is using national power to boost its chip industry. China has also been poaching our research and development engineers," Yen told NAR on Feb. 8.

Local Taiwanese media reported that China's smaller rival Shanghai Huali Microelectronics recently poached a team of some 50 engineers from UMC.

Yen confirmed some UMC employees accepted offers from Chinese companies, but he said the number was not as high as reported while declining to provide more details.

Pua Khein-seng, chairman of Taiwan-based Phison Electronics, said in a recent press conference that China is constantly looking to hire Taiwanese engineers. Phison is the world's leading memory driver integrated circuit supplier.

"Talent poaching is happening every day. Chinese companies love Taiwanese engineers because they are cheaper, more professional and responsible than Chinese employees," said Pua.

To alleviate the brain drain, Taiwan's newly appointed Minister of Science and Technology Chen Liang-gee said the island needed to create a better environment and future for its workers to keep them at home.

Chen on Feb. 8 pledged to dispatch at least 50 Taiwanese doctoral students this year to Silicon Valley and to send more, at least 100 to 200, annually later.

In recent years, Taiwan has been alarmed by the departure of high-profile names in the local chip industry for China.

Chiang Shang-Yi, former TSMC co-operating officer, became an independent board member at China's No. 1 contract chipmaker Semiconductor Manufacturing International Co. last December.

While Chiang joined SMIC long after he left TSMC, many in Taiwan's tech industry fear his move would help China catch up.

Later that month, Tsinghua Unigroup confirmed that it had hired former UMC Chief Executive Sun Shih-wei to be its executive vice president.

In 2015, Taiwanese chip veteran Executive Charles Kau joined Tsinghua Unigroup and reportedly helped the Chinese government-controlled entity recruit many Taiwanese managers.

Kau previously headed Inotera Memories, formerly a joint venture between Micron and Taiwan's Nanya Technology. Micron acquired Nanya's stake in Inotera in late 2016.

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