Thousands of Taiwanese chip experts moved to China for better pay: Reports

Tech companies in China in certain cases is offering more than double the salary compared to Taiwan to lure Taiwanese chip experts to relocate and work in mainland China.

While battling against the United States for supremacy in technology development, especially in key areas like semiconductors, China has lured thousands of Taiwan employees to work in mainland China by offering lucrative salaries, according to a local Taiwanese media report.

As many as 3,000 chip experts have already left Taiwan and are currently working in mainland China, which accounts for about 10% of the total 40,000 semiconductor research and development experts on the island, Taiwan's Business Weekly said in a report published this week.

Most mainland tech firms can generally offer double or even triple the existing salaries of chip experts in Taiwan.

One Taiwanese engineer said that his new boss in China offered to pay for his daughter's tuition fees at a Chinese private school in a bid to attract him to join the company, according to interviews in a Nikkei Asian Review report.

The outflow of Taiwanese chip talent is believed to be the result of the Made in China 2025 initiative created by Beijing a few years ago, an ambitious plan that outlays China's desire to lead the world in 10 core high-tech industries, including the semiconductor sector, as well as to get rid of dependence from foreign technologies by that time.

The Chinese government has also gained a sense of urgency for accelerating its development in these key high-tech industries, especially after some Chinese tech companies like Huawei were added to the US Entity List which has effectively banned them from purchasing US components.

Taiwan, as one of the major semiconductor powerhouses globally, has always been one of the major sources of chipset imports for Chinese tech firms. As some Chinese companies are banned from purchasing US products, Japanese, South Korean, and European companies have also played important roles in China's technology development.

China's tactic of using high salaries to lure Taiwanese chip experts has worried people in Taiwan as they believe the trend could cause a brain drain in its own semiconductor sector, according to the Taiwanese media report.

This outflow of talent did not begin overnight however; it follows the trend of Taiwanese chip experts moving to mainland China that first began at the start of the century. After Richard Chang's business in Taiwan was acquired by Taiwan Semiconductor Manufacturing Company (TSMC), Chang brought more than 100 chip experts from Taiwan to Shanghai in 2000 to establish the Semiconductor Manufacturing International Corp (SMIC). TSMC is currently one of China's largest semiconductor manufacturers.

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