Taiwan’s Ministry of Economic Affairs reported 118 investigations since 2018 into Chinese companies that hid their ties while recruiting local chip engineers. The probes uncovered 34 clandestine labs, seized NT$1.2 billion (about US$39 million) of equipment, and led to 21 indictments. Notable cases include a Shenzhen‑based entity masquerading as a Singaporean startup to lure talent from TSMC and UMC, and a Guangzhou firm that used a fake Taiwanese subsidiary to attempt acquisition of 5‑nm lithography tools.

The revelations underscore the limits of relying on geographic separation to protect critical technology. For the United States, which is pouring $52 billion into domestic chip production via the CHIPS Act, any leakage of Taiwanese know‑how to China threatens to erode the strategic advantage the act seeks to build. It also validates Washington’s push for stricter export controls and tighter vetting of foreign investments in U.S. semiconductor firms.

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