chip Photo:VCG

Chinese mainland-based semiconductor companies and industry analysts have refuted claims of alleged "illegal" headhunting targeting Taiwan-based companies, in response to a recent probe by Taiwan authorities of 10 mainland-based firms.

Industry insiders and analysts called the probe a concerning escalation that targets mainland industry participants with branch offices on the island, as the island is following closely in the US' footsteps in an ill-intended attempt to suppress the Chinese mainland-based  semiconductor industry.

Taiwan's local justice authority said on Thursday that it simultaneously searched 10 mainland companies or R&D bases operating in the island without approval in locations including Taipei and Taiwan's semiconductor high-tech center Hsinchu. It interviewed and investigated nearly 70 people, according to media reports.

The raid was conducted over the alleged "illegal poaching" of island-based chip engineers and other talent, which the island's investigation bureau claimed has seriously affected the region's security and competitiveness, Singapore-based zaobao.com reported on Friday.

Several semiconductor companies that were targeted in the raid strongly denied that they were involved in any "illegal" activities including headhunting, calling it a concerning move to squeeze their normal business operations on the island.

A manager with a Hangzhou-based technology company said that the company has a research base in Taiwan island, but all business activities including recruitment there abide by local laws and regulations.

Headhunting activity and talent flows are normal in every industry, especially for those companies that have big demand for talent, the manager said.

"I think what the Taiwan authorities are doing is totally unreasonable. Our company's local business is compliant and legal, and when we sign labor contracts with new employees, we also confirm with them whether they are under contract with any other company at the same time," the manager said.

This is not the only clampdown by the Taiwan authorities targeting mainland companies. A senior official at Taiwan's investigation bureau told reporters last month that investigations had been launched into about 100 mainland companies alleged of "illegally" poaching local talent, according to zaobao.com.

Industry insiders said that what lies behind the raids belong to an escalated political move by the Taiwan authorities to follow in the US' footsteps to besiege the Chinese mainland in the high-tech field.

An analysis by the US Semiconductor Industry Association released in January showed that in 2020, the compound annual growth rate of the semiconductor industry in the mainland reached an unprecedented 30.6 percent, accounting for 9 percent of the global semiconductor market, surpassing China's Taiwan region for two consecutive years, just after Japan and the EU.

Ma Jihua, a veteran industry analyst, told the Global Times on Monday that the mainland's semiconductor sector grew rapidly in recent years with an increasingly mature industry chain, and the Taiwan authorities are clamping down on industry participants from the mainland with a possible political purpose to suppress their further development, to match a similar tactic of the US.

"But this will hurt the semiconductor industry of the Taiwan island as much as the mainland," Ma said, given the long supply chain of the chip industry and the close connectivity between the mainland and Taiwan island.

Many Taiwan-based companies are also setting up branches in the mainland, and there are exchanges of personnel, technology and equipment.

"If the Taiwan authorities don't reverse course and continue to suppress mainland companies, it will inevitably cause new trauma to the entire industry chain," Ma warned.