Taiwan has become the essential semiconductor manufacturing industry in the world, chosen by several leaders in the manufacture of devices, such as Samsung, Google, and Apple. Chinese companies, however, have lagged and, even with great efforts, have not been able to catch up.
Taiwan’s success and expertise in the semiconductor industry have prompted the Chinese Communist Party (CCP) to go to great lengths to steal information and talent to learn the ins and outs of the island nation’s technology industry.
In this regard, the Shilin District Prosecutor’s Office, Taipei, revealed on September 13 that China’s VeriSilicon Holdings Co., Ltd. made a significant investment in Taiwan illegally to obtain economic benefits and attract “talent,” i.e., employees with expertise in the manufacture of chips for devices.
VeriSilicon Holdings Co., Ltd. was founded in Shanghai, China, in January 2014, and silently, i.e., without the permission of the Investment Commission of the Ministry of Economic Affairs (MOEA), entered Taiwan under the name of VeriSilicon Hong Kong in the form of “foreign equity” investment.
As a result, the Taipei Court prosecuted Zhan Juncai, Taiwanese-born CEO of VeriSilicon in Taiwan, and Dai Weimin, Chinese-American CEO of VeriSilicon of China, who was placed on the 10 most wanted list.
In addition, the court requested that the responsible parties testify about the profits obtained of around $126 million (880 million yuan).
The court discovered that VeriSilicon in Taiwan was managed monthly by VeriSilicon China, to whom it was accountable. It reported semiconductor designs and delivered its profits yearly before the Spring Festival.
Ultimately, prosecutors determined that VeriSilicon operated illegally for eight years in Taiwan.
There are many examples of how the CCP, through its corporations, has tried to take advantage of the island nation.
In 2021, China’s Bitmain Technologies, a leading chipmaker, was accused by Taiwan prosecutors of illegally recruiting more than 100 engineers to improve its artificial intelligence designs.
To steal semiconductor information from Taiwan has been one of the Chinese regime’s long-standing objectives, and to achieve this, it has stepped up its espionage.
China’s regime in the semiconductor industry race
This year, prosecutors’ offices in Taipei, Shilin, Taoyuan, Hsinchu, and Taichung districts ordered the investigation bureau to mobilize 100 people to investigate illegal operations in Taiwan.
As a result, in March of this year, the investigation bureau found that eight technology companies or research centers in Taichung were conducting activities outside the law. Among the major corporations were Yinxin, VeriSilicon, Silicon Valley, and Kaiyihong.
Qiu Chuizheng, Taiwan’s vice minister of the Mainland China Affairs Council (MAC), pointed out the need to strictly regulate “Chinese capital bosses.”
While Qiu Chuizheng said Chinese investors are welcome in Taiwan, he warned that if they are found to be part of illegal activities, they will be punished according to the relevant provisions of the Taiwan Strait.
Also, he revealed that China has been “poaching” Taiwan’s high-tech experts and stealing industrial technologies in recent years.
In addition, he said that it has become common for Chinese companies to engage in business activities in Taiwan through third-party investment companies to conceal their identities or sources of funds and evade regulations, endangering Taiwan’s economy and capital market.
For this reason, the China Affairs Council introduced two bills passed last May, Articles 9 and 91, to regulate China’s investment in Taiwan.
These proposals stipulate that for-profit companies in China investing through third parties will not be allowed to establish branches or offices in Taiwan without the permission of the competent authority. In addition, violators will be punished with prison sentences of one to three years and fines ranging from $290,000 to $1.4 million (2 to 10 million yuan).
On the other hand, Taiwan is also in a constant battle with Chinese hackers.
Taiwan targeted by Chinese hackers
It has long been known that the CCP has continuously spied on Taiwan to obtain information about the manufacture and design of chips for its devices.
CyCraft, a Taiwanese cybersecurity firm, revealed, in 2020, that since 2018, Chinese hackers have begun an espionage campaign against the Taiwanese semiconductor industry.
CyCraft engineers were able to intercept communications between virus-infected corporate networks and a server controlled by the hackers.
CyCraft, during a Black Hat security conference in 2020, explained that Chinese hackers attempted to steal data through a virus or software injected into the computer systems of seven major semiconductor suppliers.
The evidence reveals that they were hackers of Chinese origin and with possible links to the group called Winnti, also known as Bario or Axiom, which are part of the Chinese regime’s espionage network.
As the old saying goes, “the end justifies the means,” and the Chinese Communist Party is an expert at achieving its goals at any cost. It is now behind this billion-dollar industry, so we will see what else it is willing to do to lead it.