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Taiwan raids 8 Chinese companies for alleged tech espionage

Ministry of Justice Investigation Bureau says China poaches tech talent from Taiwan companies

Flag of China displayed on a laptop screen and binary code displayed on a screen. (Reuters image)

Flag of China displayed on a laptop screen and binary code displayed on a screen. (Reuters image)

TAIPEI (Taiwan News) — The Ministry of Justice Investigation Bureau (MJIB) raided eight technology companies with ties to China between May 22-25 for allegedly seeking to steal technology from Taiwanese companies and poach IT staff.

To counter attempts by China to engage in industrial espionage, the MJIB sent 112 investigators to raid eight companies allegedly posing as firms backed by Taiwanese or foreign investors, reported CNA. After investigators searched 25 locations in Taipei City, New Taipei City, Hsinchu City, Hsinchu County, Chiayi County, and Taichung City, a total of 49 individuals were taken in for questioning.

The Chinese companies were engaged in database management, software development, memory modules, digital integrated circuits, firmware design, solid-state drive controller chip design and development, motor driver chip research development, electronic component research and development, Internet of Things, 5G communication module and chip design, and semiconductors.

The MJIB said that in addition to injecting copious government funds into developing high-tech industries, China has used illegal means to poach talent from Taiwan's industrial chains. Investigators found that Chinese companies pose as foreign-funded firms to attract Taiwanese engineers, who are encouraged to hand over technology from their prior employers.

In addition, the bureau said that many of these companies operate small offices in Taiwan with local staff who work remotely. They also may set up two branches to keep the operation running in case one branch is shut down by the authorities.

The companies are being investigated for violating the Act Governing Relations Between the People of the Taiwan Area and the Mainland Area (臺灣地區與大陸地區人民關係條例). Two companies were identified by local media as Fuzhou Sinoregal and Quectel Wireless Solutions, both based in Shanghai.

According to the MJIB, illegal activities by Chinese companies have seriously affected the competitiveness of Taiwan's high-tech industry. The bureau vowed to continue cracking down on the illegal poaching of talent and theft of trade secrets to maintain the country's competitive advantage.