U.S.-based memory chip maker Micron Technology is planning to expand its operations and hire 800 more employees in Taiwan by the end of this year. It plans to hire 350 more next year.
As Chinese semiconductor firms have been trying to poach engineers from U.S. companies, Micron is hiring more talent in Taiwan to counter the competition from Chinese rivals, reported The Nikkei Asian Review on April 25.
Since U.S. President Donald Trump and his administration blocked several major Chinese acquisition deals to take over American chipmakers, citing national security concerns, the Chinese Communist Party (CCP) has been forced to abandon its strategy of procuring intellectual property through foreign firm investments—a tactic explicitly detailed in China’s industrial policies.
China’s semiconductor industry lags behind other nations’; the country relies heavily on foreign imported chips. Thus, the regime has made it a national priority to catch up by acquiring foreign firms’ technology.
One way to do so is to poach engineers from foreign companies.
According to Taiwan News, a Taiwanese newspaper, Chinese chipmakers have tried to lure Taiwanese engineers with salaries five times higher than what they are offered in Taiwan.
Since Micron acquired Taiwanese tech firm Inotera Memories in 2016, the U.S. company has lost more than 400 employees from its Taiwan office to its rivals in China, according to Taiwan News. Inotera Memories is a manufacturer of dynamic random access memory (DRAM), a type of memory chip commonly used in personal computers.
In April 2017, Micron sued its former employees for stealing trade secrets, alleging that they brought the company’s technology to their new employers—Chinese chip companies—and allowed the latter to make DRAM chips, reported Electronics Weekly, a magazine covering the electronics industry. About 100 former employees of Micron’s Taiwanese subsidiaries, Rexchip and Inotera, were affected by the lawsuit.
“As we look at the potential threats in China, what I can say is there is a very high bar for new [entrants] to this business because intellectual property is very rich,” said Wayne R. Allan, senior vice president of global manufacturing at Micron, at a press conference in Taiwan on April 24, according to a report by the Nikkei Asian Review.
Micron, the world’s third-largest memory chip maker, has 10 manufacturing bases, including two in Taiwan. The company is planning to make Taiwan a global manufacturing center, reported Yahoo News in Taiwan in February 2017.
There are several reasons for choosing Taiwan. First, Taiwan’s two plants are large and have high production efficiency, said April Arnzen, vice president of global human resources at Micron, according to the Yahoo News report.
Arnzen also added that the education system in Taiwan has fostered a lot of talented people that meet the company’s needs and culture.
Finally, Taiwan’s geographical location is ideal. With more and more customers in Asia, Taiwan can immediately respond to customers’ needs and make decisions for the company’s headquarters in the United States, said Arnzen.
Other tech firms have also turned to investing in Taiwan as trade tensions have escalated between the United States and China, where the business climate has become increasingly hostile to foreign firms. Three American tech giants, Google, Microsoft, and IBM, have recently announced their plans to grow their staff in Taiwan and establish research centers on the island nation early this year.