Headhunters prowl Hsinchu Science Park, where most of Taiwan’s chip companies are based, seeking potential recruits who could bring valuable know-how to South Korea or America—or China
Save time by listening to our audio articles as you multitask“magic mountain that protects the nation”. The mountain is not a sophisticated defensive fortification, nor a treaty with a big power. It is instead what Taiwanese call their $147bn semiconductor industry, equivalent to 15% ofIt accounts for nearly 40% of its exports and is a pillar of the island’s economy. It is also a guarantor of its security.
Semiconductors pose a big and growing problem for China. The government has set a target of producing 70% of its own chips by 2025. It set up a 139bn yuan National Semiconductor Fund in 2014, which it topped up with another $30bn in 2019. Local governments have poured at least $25bn more into their own such funds. In 2020, by when China produced 16% of the chips it used, it announced ten years of corporate-tax exemption for the most advanced chip manufacturers.
The exodus has alarmed Taiwanese officials. On May 20th the legislature passed amendments to its national-security laws and those that govern relations with China. The changes criminalise economic espionage and require government permission for employees of companies that work on “national core technology” and receive some form of government support to go to China.
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