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Semiconductors

Taiwan accuses China's crypto chip king of poaching 100 engineers

Prosecutors' claims over Bitmain activity come as Beijing hosts NPC

Bitmain Technologies, the world's leading cryptocurrency mining chip developer, is alleged by Taiwanese prosecutors to have illegally poached engineers.   © Reuters

TAIPEI -- Taiwanese prosecutors said China's Bitmain Technologies, the world's leading cryptocurrency mining chip developer, has allegedly illegally poached more than 100 engineers in Taiwan in a bid to boost its AI prowess.

The New Taipei Prosecutors Office on Tuesday launched a probe at seven locations in New Taipei City and Hsinchu, the heart of Taiwan's semiconductor industry, and summoned nearly 20 persons of interest for questioning.

Lists of employees, salary information, employment contracts, laptops and smartphones at two chip design companies -- IC Link Limited Company and WiseCore -- were taken back to the prosecutors office for further investigation.

The investigation comes as Beijing hosts the National People's Congress. Semiconductors have been touted at the annual meeting of the country's parliament as key to China's economic development. China has been aggressively boosting its own chip industry, a sector caught in the crossfire of Washington-Beijing tech tensions.

Taiwan has the world's second-largest chip industry by revenue after the U.S., and its high-level chip engineers have long been targets for Chinese companies seeking to advance the country's semiconductor technologies.

The prosecutors' preliminary investigation showed Bitmain allegedly first lured a senior engineer to work for a newly established Chinese company as a chairman in China, and asked the person to persuade former colleagues to follow.

Bitman later set up two companies disguised as foreign investments in Taiwan to poach talent, the prosecutors said.

"We discovered that Bitmain has been poaching Taiwanese research and development talent to speed up its efforts on artificial intelligence chip capability by illegally setting up companies in Taiwan," a spokeswoman of the New Taipei Prosecutors Office told Nikkei Asia. "The newly established companies served a headhunting purpose and the timespan of what Bitmain did dates back to 2018."

At least 100 Taiwanese chip engineers have been poached and "there could be more" as the investigation is ongoing and the questioning of these people has just started, the spokeswoman said. "So far, no evidence of trade secrets leakages have been found."

Bitmain has not yet responded to Nikkei Asia's request for comment.

Bitmain is the world's leading cryptocurrency mining chip developer, and has also ventured into designing AI chips to power smart devices, supercomputers and servers, according to its website.

Beijing has pledged to be the global AI leader by 2030. Like many chip developers across the globe, Bitmain relies on Taiwan Semiconductor Manufacturing Co., the world's biggest contract chipmaker, and others for chip production.

Under the current regulations of the Act Governing Relations between the People of the Taiwan Area and the Mainland Area, Chinese investors are not allowed to put money into Taiwan's chip design sector as it is crucial for national security. Chinese chip companies are also not permitted to set up subsidiaries on the democratic-ruled island.

Those who violate the rules can face up to one-year jail time or a fine of 150,000 New Taiwan dollars ($5,305).

Lawyers told Nikkei Asia that prosecutors could also charge Bitmain's executives with forgery because they filed papers to set up a business in Taiwan without properly disclosing their origin.

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