Taiwan authorities say they are investigating Chinese firms suspected of illegal business operations in the country, including poaching Taiwanese semiconductor talent. TaiwanPlus spoke to Chiang Min-yen from the Research Institute for Democracy, Society and Emerging Technology on the ongoing investigation and the implications of operations like this for Taiwan's chip industry.
00:00Taiwanese law prohibits Chinese investment in some parts of the semiconductor supply chain
00:05but how did these firms manage to get around the rules? We have the procedure like an investment
00:13review system so all the foreign companies including Chinese companies they have to get
00:21through this procedure to submit the application to our Ministry of Economic Affairs MOEA.
00:28In some examples we can see that Chinese entities they work with the individual in Taiwan or even
00:37individual foreigners in Taiwan to set up the companies so from the Taiwan side the governments
00:46they receive the applications like as a Taiwanese nationals or the other foreigner entities and
00:55other kinds of identities but not Chinese so they could not at first moment to identify whether
01:05this new setup or new startup have affiliations with any Chinese entities especially with Chinese
01:14semiconductor companies. And how serious is the threat of operations like this to Taiwan's chip industry?
01:21We do have very rich very in technology incentive chip industry in Taiwan and we all know that TSMC is
01:31leading in the world especially in the chip manufacturing technology so there would be talent technology
01:42technology and so many industrial know-how content within this ecosystem. These are all the key
01:50information or the key assets that Chinese chip manufacturers or chip companies they would like to acquire. The most important thing is they want to get more secret
01:54how Taiwan can be successful and how Taiwan can be successful and how Taiwan can keep doing innovations in this ecosystem and they want to get as much as they can and this kind of business of
02:10operations illegal business operations in Taiwan could facilitate the Chinese entity to acquire more information and know-how from you.
02:32Some of these Chinese firms supply U.S. tech giants like Nvidia. Do these cases put Taiwan in a tough spot between the U.S. and China?
02:42Of course yeah I want to emphasize this kind of situation is not decided by Taiwanese supply chain itself but somehow decided by the U.S. customer like in a current in a recent case the Nvidia they may designate certain suppliers across Taiwan and China and somehow it is not decided by the Taiwanese supplier themselves but because the Nvidia think it is the best solution for them so they
03:12They may ask the Taiwanese supplier to work with some Chinese supplier or maybe it is not transparent enough so they may not have enough information to identify whether there was some economic risk behind it but now they should do more they should understand their supply chain more and to get rid of some potential economic security
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