“Chinese companies are offering two to three times [Taiwanese engineers’] current salaries to work for them,” said an unnamed Taiwanese engineer in a recent interview with Japanese media Nikkei.
In August 2018, Taiwan’s Central News Agency reported that Nanya Technology, a Taiwanese maker of DRAM chips, lost 48 of its senior experts to China in less than two years. DRAMs are semiconductor memory chips within digital products that store data.
Inotera Memories, another Taiwanese DRAM maker, saw 400 of its employees leave for China after the company was acquired by U.S. tech company Micron in 2016.
Building up China’s ability to develop and manufacture its own semiconductors is a key goal of the government’s “Made in China 2025” strategy issued in 2015. The plan seeks to catapult China to the forefront of the world’s modern economies, but the trade war with the U.S. that has seen bans on chip exports to major Chinese companies has added new urgency to the effort.
Made in China 2025 sets self-sufficiency goals for semiconductors at 40% for 2020 and 70% for 2025.
Self-sufficiency is viewed through the lens of national security. But China had reached only 15% for semiconductors in 2018, putting the targets in question.
“While U.S. pressure may affect the operations of companies such as Huawei Technologies in the short run, on a medium- to long-term basis, Chinese manufacturers will increase procurement from within China, and it will result in the growth of domestic equipment and materials makers,” said Lung Chu, president of industry association SEMI China.
The country is slow in developing semiconductor production equipment and materials. But China has produced the likes of HiSilicon, a world-class semiconductor designer owned by Huawei.