Taiwan accuses Bitmain of illegal recruitment of engineers

Taiwanese authorities have launched an investigation into the Chinese mining giant Bitmain, journalist Colin Wu reported, citing local media.

Breaking: Because Bitmain hired hundreds of chip engineers in 2017, 19 people were interviewed by the local government in Taiwan. Some of them may be prosecuted and sentenced to one year in prison. https://t.co/wUaqwAc1Gd pic.twitter.com/72zFrhEbbu

— Wu Blockchain (@WuBlockchain) March 9, 2021

According to sources, the case concerns unfair competition in high technology and possible violations of the Trade Secrets Act. Bitmain allegedly aimed to accelerate advances in artificial intelligence.

Nikkei Asia argues that Taiwanese specialists “have long been targets for Chinese companies.” Meanwhile, the law bans investors from the PRC from funding strategic industries.

According to preliminary results cited by local media, Bitmain, through third parties, established two companies in Taiwan—Zhijiao and Xindao. With their help the mining giant has illegally poached over 100 chip R&D specialists since 2017.

Sources said such actions by Bitmain could not only lead to a brain drain of highly skilled personnel but also “threaten the development of Taiwan’s semiconductor industry.”

On Tuesday, 9 March, police conducted searches at seven addresses in New Taipei City and Hsinchu, and summoned 19 people for questioning, according to local media.

According to them, prosecutors seized employment contracts, accounting records and lists of staff from two chip-design companies—IC Link Limited Company and WiseCore.

“There is as yet no evidence of trade-secret leakage,” said representatives of the agency in a Nikkei Asia commentary.

Wu, citing Bloomberg, noted that Bitmain’s mining chips “are manufactured exclusively at Taiwan’s TSMC.”

Bloomberg: Bitmain is suspected of illegally hiring hundreds of engineers from Taiwanese companies. New Taipei Prosecutors conducted an investigation into its office. Bitmain did not respond. Bitmain’s mining machine chips are entirely from Taiwan’s TSMC. pic.twitter.com/ErjcfbAda2

— Wu Blockchain (@WuBlockchain) March 9, 2021

Industry sources say the sector is concerned about Bitmain’s ties to TSMC, as well as potential shipments of mining devices and a future listing.

Industry is very worried about the relationship between Bitmain and TSMC, and whether Bitmain’s mining machines can be successfully shipped and whether they can be successfully listed in the future.

— Wu Blockchain (@WuBlockchain) March 9, 2021

Lawyers interviewed by the outlet acknowledged that authorities could also indict Bitmain’s management for doing business without a license and for document-forgery tied to the firms’ formation.

According to Nikkei Asia, the guilty face a prison term of up to one year or a fine of NT$150,000 (~$5,300).

In March, the Chinese government unveiled a five-year plan to accelerate the development of advanced technologies, including artificial intelligence and quantum computing.

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