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Today's Topics:
1. 'Huawei offers triple pay to lure staff from a key supplier
of chip-making parts' (Stephen Loosley)
----------------------------------------------------------------------
Message: 1
Date: Sat, 30 Nov 2024 19:50:53 +1030
From: Stephen Loosley <[email protected]>
To: "link" <[email protected]>
Subject: [LINK] 'Huawei offers triple pay to lure staff from a key
supplier of chip-making parts'
Message-ID: <[email protected]>
Content-Type: text/plain; charset="UTF-8"
China Is Bombarding Tech Talent With Job Offers. The West Is Freaking Out.
Huawei offered triple pay to lure staff from a key supplier of chip-making
parts, sparking German investigation
By Bertrand Benoit, Liza Lin, Heather Somerville and Kim Mackrael Updated Nov.
27, 2024
Archived: https://archive.md/wK1tR#selection-5659.0-11917.14
From: https://www.wsj.com/world/china-tech-poaching-job-offer-pay-raise-f8ceac5b
OBERKOCHEN, Germany?Executives at Zeiss SMT, which makes indispensable
components to build the most powerful semiconductors, got some troubling news
last fall.
Headhunters from Huawei Technologies, the Chinese tech firm, were trying to
poach its employees.
Staff with access to sensitive Zeiss know-how received LinkedIn messages,
emails and calls from Huawei representatives, offering them up to three times
their salaries to join the Chinese company, according to people with knowledge
of the situation.
The push triggered an investigation by German intelligence officials, who
feared it could provide a back door for Huawei to access some of the most
sophisticated intellectual property. The investigation remains open, people
familiar with the matter say.
It was the latest sign that talent-poaching has become a crucial front in the
battle between China and the West for tech supremacy.
As Western governments make it harder for China to access sensitive
technologies?a trend expected to continue under the administration of
President-elect Donald Trump?many Chinese companies are trying to get ahead by
luring away top engineers in areas such as advanced semiconductors and
artificial intelligence.
Chinese firms are focusing on several tech hubs, including Taiwan, parts of
Europe and Silicon Valley. Some obscure their Chinese origins by forming local
ventures that hire the employees to avoid drawing attention from local
officials, authorities say.
Oberkochen, Germany, where Zeiss SMT?s headquarters are off-limits to most
visitors because its technologies are considered so advanced.
The push is forcing officials in the U.S. and Europe, many of whom view
recruiting as an ordinary business activity that shouldn?t be restricted, to
confront whether they need to do more to police the practice, and if so, how.
Taiwan, which already has strict rules on Chinese recruitment, said in
September that it had launched a crackdown, accusing eight mainland
Chinese tech companies of illegally poaching talent from the island,
threatening Taiwan?s competitiveness.
South Korean authorities are toughening punishments for individuals who
illegally transfer sensitive technologies to foreign countries such as China,
including when they are recruited. The country is grappling with several cases,
including one in which an ex-Samsung Electronics executive was charged with
illegally obtaining Samsung?s factory blueprints to build a copycat chip plant
in China.
The U.S. and Europe remain fairly open for recruitment by most Chinese
companies. But European intelligence officials say they have been watching with
concern as China-linked actors try to lure experts from the continent?s
high-tech companies. U.S. intelligence agencies said in their latest threat
assessment that they believed China was trying to use talent recruitment as one
way to become a science and technology superpower.
Semiconductor secrets
Western security officials are especially concerned about China?s efforts to
target ASML Holding, among the world?s most important tech companies, and its
suppliers, including Germany?s Zeiss. The Dutch firm is the only one capable
globally of making sophisticated machines needed to print structures smaller
than 1/10,000 of the width of a human hair onto chips for advanced AI and other
applications.
It took ASML decades to master such lithography machines, known as EUV
scanners. Without them, China can?t make chips at the cutting edge.
The Dutch government prevents ASML from shipping its EUV machines, which also
could have military applications, to China.
Since 2021, Huawei has hired dozens of engineers and other staff based in China
who were working on lithography and optics for companies including ASML and
other Western firms, data from LinkedIn and Chinese job networking site Maimai
shows. A Chinese engineer who left ASML about a decade ago with knowledge of
some of its software later set up a rival company in China, according to
corporate registrations and ASML.
One former Taipei-based employee of ASML said he received inquiries from
Chinese recruiters every month for two years after he left the company in 2020.
The engineer said Huawei was particularly persistent, with repeated efforts to
connect on LinkedIn. He never responded.
ASML said it had no indication of unusual recruitment activity toward its
employees and the rate at which employees leave is very low in the Netherlands
and globally.
China?s Foreign Ministry said it wasn?t aware of the examples of talent
poaching, adding that China?s interaction with foreign talent is no different
from that of other nations. Huawei didn?t respond to requests for comment.
?Spray and pray?
China has made clear that recruiting is a priority, especially for competitive
technologies such as AI. A government blueprint for AI development in 2017
called for attracting the ?sharpest? talent, including ?international top
scientists? in areas such as machine learning, automatic driving and
intelligent robots.
Luring foreign engineers can provide a valuable shortcut for Chinese companies
because their experience cannot be easily duplicated or stolen, said Paul
Triolo, a partner at business consulting firm DGA Group.
?Governments now care more about this,? he said, although determining where to
draw the line on acceptable recruitment will be ?a very difficult task and
difficult to enforce.?
Many governments have already restricted academic and business partnerships
with China or introduced investment-screening programs for Chinese
acquisitions. State funding for Chinese companies enables them to offer
salaries beyond what Western companies can pay.
Germany has banned Huawei technology from some parts of its telecommunications
networks.
Many engineers are reluctant to entertain such offers, citing reputational
risks and concerns about fitting into Chinese corporate culture. Yet Chinese
companies make so many approaches?a strategy one former Huawei recruiter
described in an interview as ?spray and pray??that inevitably some say yes.
Often, they bring trade secrets with them. Last year, the chief executive of
Californian semiconductor company FemtoMetrix testified to Congress that his
company?s trade secrets had been stolen when three employees left to start a
semiconductor company in China, bringing thousands of FemtoMetrix files with
them.
Alon Raphael, FemtoMetrix?s CEO, said in his testimony it was an example of
China?s ?playbook for the theft of American intellectual property.?
In an interview, Raphael said his company is ?barely? still in business, and he
hasn?t been able to raise substantial funding since the theft.
China?s Foreign Ministry said China respects intellectual property rules and
that any reports of alleged intellectual-property stealing were baseless
slander.
Taiwan?s troubles
In Taiwan, home to Taiwan Semiconductor Manufacturing, the world?s largest
contract chip manufacturer, officials say they started seeing an increase in
Chinese talent poaching and trade-secret theft around 2015. Frustrated, they
approved new rules in 2022 that bar anyone from leaking technology critical to
national security and Taiwan?s industrial competitiveness to foreign countries.
Offenders face up to 12 years in prison and a fine of up to the equivalent of
about $3 million. Taiwan also strengthened penalties for domestic firms that
act as fronts for Chinese companies to hire talent.
?The know-how is in their brains, and in some cases, a whole team could be
poached by a Chinese company,? said Sun Chen-yi, deputy director general of the
investigation bureau at Taiwan?s Ministry of Justice. Between 2020 and July
2024, the ministry investigated about 90 cases of talent poaching, most related
to semiconductors, electronics and machinery, Sun said.
A Taiwan Semiconductor Manufacturing Co. facility in Nanjing, China.
Several years ago, Liang Mong Song, a former senior Taiwanese engineer at TSMC
and Samsung, joined China?s largest contract chip maker, Semiconductor
Manufacturing International. Liang is often credited with the rapid ascendance
of Shanghai-based SMIC, which last year helped Huawei to produce its most
advanced smartphone processor, a seven-nanometer chip used in one of its most
powerful phones.
In Taiwan?s latest crackdown, authorities said they raided 30 locations and
questioned 65 individuals across four cities. Among the eight companies accused
of illegally poaching talent was a large Chinese chip toolmaker.
Some Chinese chip firms try to obscure their origins, working with headhunters
based in Singapore and Hong Kong. They also pair up with Taiwanese to open
companies on the island to hire local engineers, investigators say.
German connection
German authorities are also concerned about China?s efforts to lure engineers
from its ASML suppliers.
Zeiss SMT?s specialized mirrors form the centerpiece of ASML?s elaborate EUV
systems, which are sometimes the size of a bus. Zeiss?s technologies are
considered so advanced that its headquarters are off-limits to most visitors.
Images in its promotional materials are carefully edited so as not to give away
trade secrets.
When Zeiss employees flagged Huawei?s poaching attempts last fall, they shared
recruiters? profiles with their managers, according to people with knowledge of
the situation. Although no employees jumped ship, the head lobbyist for Zeiss
SMT?s parent company raised the matter with government officials, triggering
the German intelligence investigation, people familiar with the matter say.
Zeiss and Germany?s domestic intelligence agency, the Federal Office for the
Protection of the Constitution, also known as BfV, declined to comment.
It later turned out that Huawei had also been targeting Trumpf, a German
company that produces a laser amplifier that creates a concentrated light
source to produce chip details, some of which are a fraction of the size of a
grain of sand.
[A Trumpf employee inspects a semiconductor wafer in Ulm, Germany.]
A Trumpf spokesman said it ?has also registered intensified approaches by
Chinese companies such as Huawei targeting our employees.? None was successful,
he said.
Berlin authorities have held off from interfering too much in business
decisions such as whom employers can hire.
Berlin recently adopted legislation barring telecommunications operators from
using Huawei components in sensitive parts of Germany?s networks, echoing more
stringent restrictions the U.S. imposed on Huawei in 2020. But the Chinese
company?s handsets and other products are still sold in the country. Huawei
runs five research centers across Germany working on optical systems and other
areas.
Many government officials are skeptical that poaching can be prevented. New
legislation that could have made it harder for Chinese companies to set up in
Germany with a view to recruiting talent is likely to fail after Chancellor
Olaf Scholz?s government collapsed.
Still, Friedrich Merz, head of the center-right Christian Democratic Union and,
according to polls, the likeliest candidate to become the next chancellor, has
sounded tougher notes on China.
?German companies are also a target,? he told German newswire DPA in an
interview earlier this year. ?And that is not OK.?
Joyu Wang in Taipei and Dustin Volz in Washington contributed to this article.
Write to Bertrand Benoit at [email protected], Liza Lin at
[email protected], Heather Somerville at [email protected] and Kim
Mackrael at [email protected]
Corrections & Amplifications
Germany?s domestic intelligence agency is known as BfV. An earlier version of
this article incorrectly spelled it as VfB. (Corrected on Nov. 27)
Copyright ?2024 Dow Jones & Company, Inc. All Rights Reserved.
87990cbe856818d5eddac44c7b1cdeb8
Appeared in the November 27, 2024, print edition as 'China Firms Lure West?s
Tech Talent With Huge Raises'.
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What do you think?
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rm
ronald moore
17 hours ago
Not surprising at all. They are already heavily invested in almost all of our
southern neighbors.
They don't care where they recruit their talent. Their tenacles have reached
around the world for at least the last 15 20 years. And they have been very
successful at it
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AG
Andrew Grogan
18 hours ago
China has border "exit" controls. Westerners beware, you can be refused to
leave by the government. It is all very efficient.
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2
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TB
Thomas Brown
20 hours ago
Downfall of being a free society is that we allow our enemies to walk freely
among us. They buy our land, our companies, and now our people.
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MM
Michael Mallari
20 hours ago
There are soooo many highly-educated, highly-experienced, and very talented
tech engineers and tech leaders in the market who have been unemployed for
several months and even a few years ... the low-hanging fruit for China. I'm
curious how these engineers will decide between getting spoiled by China and
unemployment. My hypothesis: As companies are becoming hyper-optimized in their
hiring and retention practices, that very thing will be the tipping point. Why
is it getting harder and harder to work in in-demand jobs, when someone else is
making it easier? Canada is already pouching talent. It will be so much easier
for China to do the same (and more).
(Edited)
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Sree Srinivasan
1 day ago
The Swiss, German, and other talent may have resisted 3X salaries but watch
out; they may not be able to resist if the Chinese entice them instead with
that old reliable: 3-letter word ending with X!
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Raymond Lee
1 day ago
Agree. Everyman's downfall.
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SAMUEL CUSHINERY
1 day ago
And here I thought Sree was talking about tax!
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MM
Michael Mallari
20 hours ago
I was thinking the same. Ha!
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MM
Masood Mortazavi
1 day ago
Truth hurts but it doesn't change.
China spent between $2 to $3 trillion to upgrade its cities, its country-side,
its innovation environment, business organizations, and its
transaction-and-transportation infrastructure during the same 20 years when the
US wasted $14 trillion of its national tax treasury on militarism, murder and
mayhem in West Asia propping a regime which was intermittently but intently
exterminating a local population.
Now, the US blames China for its own drastic policy mistakes.
Unfortunately, for the present power elite, entertaining a false account of
reality will never produce a better policy.
https://www.wsj.com/articles/who-won-in-afghanistan-private-contractors-troops-withdrawal-war-pentagon-11640988154
(Edited)
link entity
Who Won in Afghanistan? Private Contractors
wsj.com
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JY
J Yang
1 day ago
Just look at how many American companies, according to the word used in this
article, "stole" talents from around the world to build up American
technologies, paying them 3x, 4x wages many times. Silicon Valley companies are
filled with Chinese and other foreign tech talents.
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Michael Mallari
20 hours ago
Fact.
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MR
Mark Ryan
1 day ago
As soon as workers get too good to be true offers to be paid more, the
government steps in to stop it. If these people are worth that amount with
their skills to a foreign company, then they should be able to do whatever they
like. Politicians all over the planet when they leave office take jobs working
for foeriegn governments as "advisers", "consultants" or "after dinner
speakers". If an ycountry prevents its citizens from working in another country
then they are the ones who are restricted freedom, in other words behaving
exactly the same as what they are accusing China of being.
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DONALD BIBEAULT
1 day ago
The Chinese try every possible route to undermine our country. When my nephew
graduated from MIT a few years ago every category of degree such as "nuclear
engineering science" had two thirds of its graduates Chinese. Of course degrees
alone don't confer competence but combined with good experience it can be a
substantial drain on our capability. Our government should undertake to a
innumerate all of the Chinese initiatives to undermine our strength
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MM
Michael Mallari
20 hours ago
So true. I've seen it first hand when I was an MS student at Columbia, and
later as an adjunct faculty at Columbia. Over 75% of students in my STEM
program were Chinese (not even Chinese American). I'd hate to compare this to
an arms race, but money talks. Are we investing enough into the very, very
early stages of our future generations so that they're prepared for the rigor
of a STEM education and career?
(Edited)
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MY
Mike Y
22 hours ago
That is the way US stealing talents from countries all around the world using
money or scholarship etc as incentive, causing huge brain drain to those
countries and helping US advance. Now China is just emulating what US has been
doing. And you're crying foul
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TB
Thomas Brown
20 hours ago
But with current immigration policy, we educate people and then force many of
them to go home because we won't let them work here. Basically building their
economies and not ours.
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AJ
A Jogalekar
1 day ago
How is offering employees of companies triple their salaries ?stealing IP?,
exactly? Some would call it ?capitalism?. To counter it we need better STEM
education and to pay our scientists and engineers better. But none of that can
happen when both parties are interested in denying science which they don?t
like and scoring idealogical points over the other side.
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EJ
Eleonora Jones
1 day ago
America is afraid of the brain drain that it has practiced for a long time.
Funny.
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MS
Martin Schneider
17 hours ago
It worked for us, so yes, we should worry about an enemy using it. "Fair" is
not a factor,
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JL
John L
1 day ago
"A Trumpf spokesman"? Are all these articles written by AI now? AI can't spell
the last name of most known man in the world, but may soon trigger WW3.
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Eleonora Jones
1 day ago
Your little human brain certainly skipped this paragraph: ? It later turned out
that Huawei had also been targeting Trumpf, a German company that produces a
laser amplifier that creates a concentrated light source to produce chip
details, some of which are a fraction of the size of a grain of sand.?
You?re welcome.
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WF
Will Feng
1 day ago
Poaching employees is not stealing technology. Violating patent laws is
stealing technology. China has some of the best electric vehicle and battery
engineers. Why not poach them with 3x pay and a green card? While you're at it,
why not consider poaching me? ?
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WW
WSJ WSJ
1 day ago
so true
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JOHN AASTED
1 day ago
If the job is critical to the west's security the rule should be simple: take
the job and go to jail.
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WW
WSJ WSJ
1 day ago
hahha you better do this and nobody would like to be under this regime and
would grow contempt
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EJ
Eleonora Jones
1 day ago
That?s ridiculous
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MS
Martin Schneider
17 hours ago
WHY?
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DS
Dolo Santos
1 day ago
3x a German Engineer salary is just a third of a Bay Area salary. I met German
AI engineers in charge of 100 people how make less than $100k/year.
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JL
John L
1 day ago
But they have universal health care, early retirement and sausages on demand,
with free beer steins.
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KW
Kevin Walmsley
1 day ago
Literally a photo, in the article itself, of a Taiwan Semiconductor plant
located in Nanjing.
Tech companies one day are complaining to the WSJ about Chinese companies
trying to hire away their top talent. And the comment sections predictably
fill up with those accusing anyone who takes that offer of committing treason.
Those same companies -- Intel, Qualcomm, Samsung, Apple, TSMC, Microsoft --
open new innovation centers, in partnership with local Chinese governments.
All of them do. And nearly half of ASML's sales are in China, because China is
where everything gets built that uses semiconductors.
Great comment section though. Never disappoints.
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EJ
Eleonora Jones
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