One of the challenges for Chinese companies in developing chip production machines is the shortage of experienced professionals. Therefore, they aggressively recruit Western personnel.
This phenomenon is especially common in fields such as advanced lithography and optics. Because companies like Huawei want only heasmt best, they recruit experienced professionals from ASML and Zeiss SMT, offering lots of money in exchange for their knowledge and experience. This reports tom’s Hardware based on reporting by The Wall Street Journal.
Three times current salary
Huawei approached employees of Germany’s Zeiss SMT, which produces optics for ASML’s lithography machines. The Chinese giant offered up to three times their current salary. This led to serious concerns in the U.S., Europe, and Asia about intellectual property theft and risks to national security.
German intelligence began investigating after Zeiss employees raised the alarm, fearing that sensitive technological knowledge would fall into the wrong hands. Huawei also targeted other German companies, such as Trumpf, which develops laser amplifiers for chip production.
Two years ago, the U.S. government required its citizens and Green Card holders to apply for a permit to work in the Chinese semiconductor sector on certain products. This caused the departure of professionals at companies such as AMEC, Huawei and Naura. Those employees are crucial to building Chinese knowledge in chip production machinery.
As a result, Chinese companies accelerated their recruitment efforts in Europe. ASML and its suppliers, including Zeiss, are key targets. Huawei and other Chinese companies already hired dozens of engineers with expertise in advanced optics and lithography, with some reportedly transferring trade secrets to Chinese entities.
Stringent penalties in Taiwan
Countries such as Taiwan, South Korea, and the U.S. have taken steps to crack down on such hiring practices. Taiwan has investigated about 90 cases of “headhunting” since 2020 and imposed severe penalties, including up to 12 years in prison for leaking critical semiconductor technology. South Korea has toughened penalties for unauthorized technology transfer, targeting former employees who help Chinese companies copy sensitive technologies.
Despite controls, engineers in Asia, Europe, and even the U.S. remain open to recruitment attempts by Chinese companies. This allows companies like Huawei to consistently target engineers, sometimes through middlemen or local companies that conceal their Chinese origins.
These practices are called “spray and pray” strategies because they recruit en masse in hopes of making a few successful hires. Because Chinese chip machine manufacturers are often government-funded, they can offer salaries far above those of Western companies.
Transfer of knowledge and expertise
Although many engineers decline such offers because of reputational risks and cultural concerns, some accept them, often transferring valuable expertise and trade secrets. One case involved three employees of California-based FemtoMetrix, whose departure and subsequent data theft nearly destroyed the company.
Governments are struggling to regulate these practices. Taiwan, for example, has banned domestic companies from covering for Chinese recruiters. Larger-scale measures to restrict recruiting are encountering challenges, however, partly because of concerns about over-regulating business activities.