300 Taiwanese engineers have gone to the wafer fab of mainland China!

China has been actively importing semiconductor talents since 2014, and this year the US-China trade war intensified, accelerating this process.

In 2017, China imported semiconductors worth $260 billion. Chips made at home only meet less than 20% of domestic demand.

H&L Management Consultants, a recruitment company in Taipei, estimates that more than 300 Taiwanese senior engineers have moved to Chinese chip manufactures this year. Prior to this, nearly a thousand talents have gone to Chinese companies, since Beijing set up a $22 billion fund to develop the chip industry in 2014.

Analysts believe that the mainland is still lagging behind Taiwan for many years in chip design and production, although it is moving forward in low-end chip production.

There is a gap in the mainland talent market.

This year ZTE incident of the US-China trade war has accelerated the process of talent transfer.

Washington hit Chinese semiconductor industry with a 25% tariff on $16 billion in Chinese products. Reuters analyzed that this will weaken the competitiveness of Chinese chips compared with Taiwan and South Korean products. Beijing was originally targeted at producing at least 40% of semiconductors by 2025.

Research institutions in China estimate that by the end of 2017, there will be about 400,000 professionals in the integrated circuit industry, while by 2020, the number of talents required will be 720,000, which is a huge gap.

Recruiters say that compared with South Korean and Japanese talents, mainland China prefers Taiwanese talents because of the language and culture.

"It takes three years to make ten years of money. "

Lin Yu-Hsuan, from H&L Management Consultants, told Reuters that Taiwanese engineers were attracted to mainland manufacturers such as Semiconductor Manufacturing International Corporation(SMIC). "Many of them say that the money earned on the mainland in 3 years is commensurate with 10 years' income in Taiwan. They can retire early", Lin Yu-Hsuan said.

Wang Shouren, general manager of Novatek Microelectronics in Taiwan, said: “a small proportion of employees have been transferred to the mainland in the past two years due to their treatment. It is difficult for Taiwan enterprises to compete with the Chinese enterprises in terms of treatment.”

A Taiwanese chip engineer who moved to the mainland revealed that the Chinese company offered a new three-bedroom apartment at a 40% discount on the condition that he would work for the company for more than five years and that his salary was 50% higher than in Taiwan. He said: "China dares to burn money. On the contrary, Taiwanese companies have limited resources."

A senior executive at Sien IC manufacturing corporation(SIMC), a new chipmaker in Qingdao, China, revealed that one-third of the 120 engineers recently recruited came from Taiwan. He said anonymously,"We are not short of money but talents."

He released the company offers generous subsidies for new employees such as discounted properties and bilingual schools in Qingdao. "Taiwanese engineers have the most experience to help us cultivate local talents."

Is Taiwan doing enough to retain talents?

According to Reuters, in Taiwan the leading companies in integrated circuit design and chip manufacturing have increased their labor costs by 35% in the past two years, including wages and benefits, but their revenue only increased by 21%.

Taiwan is increasingly worried about the mainland’s plan to attract talents. Thus, it has long forbidden chip manufacturers such as TSMC to bring the most advanced technology to China. In order to retain talents, the Taiwan Executive promised to reduce taxes on employee rewards and stocks in July. Taiwanese politicians have also voiced their support. Despite this, some Taiwanese engineers still have difficulty in rejecting the conditions of Chinese companies.

In 2016, Tommy, a 37-year-old Taiwanese chip engineer, joined the United Semiconductor in South China which is a joint venture between UMC and its Chinese mainland partner. He said: "If you stay in Taiwan, you don’t have any chance." The Chinese employer provided him with a school subsidy of 60,000 yuan per year for his 5-year-old son, and more than twice the salary of Taiwan.