Taiwan Claims Chinese SMIC Illegally Recruits Local Workers

Taiwan launched a probe into Chinese chipmaker Semiconductor Manufacturing International Corp. SMIC is suspected of illegally recruiting local employees to support the company’s push to manufacture advanced chips.

Taiwan’s Investigation Bureau said SMIC is accused of opening an office, supposedly registered as a Samoa-based company, to recruit local engineers. Authorities raided 34 locations owned by 11 China-based tech companies, including SMIC. Taiwan requires Chinese companies conducting business locally, including recruiting, to obtain formal government approval.

In 2023, Huawei shocked the industry by using SMIC’s 7nm processing technology to produce its Kirin 9000S, which powered the Mate 60 flagship lineup. The release raised questions about the companies bypassing US restrictions on chip machinery.

SMIC is rumored to have developed a chip using 5nm process technology in the first half of 2024 despite not having access to advanced EUV equipment from ASML. The Chinese chipmaker will complete its 5nm chip development this year using less advanced deep ultraviolet lithography equipment. The downside of DUV is that the yields reportedly are just one-third that of TSMC, making its chips 50% more expensive.