[Hardware] China Poaches Over 100 TSMC Engineers to Bolster Domestic Chip Industry

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It's all about the talent.

 

 

Having the right talent doesn't necessarily mean instant success, but it's a good step down the correct path. Nikkei Asian Review recently reported that Chinese chipmakers Quanxin Integrated Circuit Manufacturing (QXIC) and Wuhan Hongxin Semiconductor Manufacturing Co. (HSMC) have recruited over 100 ex-TSMC engineers and managers since last year.

 

The two government-backed companies are newcomers to the chipmaking game. HSMC and QXIC came into existence in 2017 and 2019, respectively, as pawns in China's push for self-sufficiency. Former TSMC top executives head HSMC and QXIC. One of Nikkei's sources claimed that HSMC offered compensation packages that were simply too attractive to refuse. Remuneration was reportedly two to 2.5 times higher than what the person's annual salary with bonuses at TSMC.

 

HSMC and QXIC are focusing on the 14nm and 12nm manufacturing processes. The aforementioned process nodes are admittedly outdated by TSMC's standard, but they should prove to be quite beneficial for China. HSMC plans to have a $18.4 billion fab up by 2022 to manufacture 14nm chips. Its roadmap eventually leads to 7nm offerings too.

 

TSMC has good reasons to worry about losing its assets, especially when there is a possibility that the chipmaker's trade secrets could illicitly exchange hands in the transition process. TSMC's annual turnover rate is less than 5%. Nevertheless, TSMC has started to take action to protect its intellectual property, such as requesting equipment manufacturers to sign an agreement to not sell TSMC's customized tools to HSMC or QXIC.

A previous Nikkei report revealed that Taiwan has lost over 3,000 chip engineers to China. It goes without saying that TSMC was a bit worried when QXIC miraculously opened up a research and development center nearby TSMC's 5nm plant in south Taiwan. QXIC certainly didn't set up shop there for the weather.

 

China has a knack for poaching the right talent and welcomes rival industry veterans with opened arms. The Chinese chipmakers not only throw more money at their prospects, but also offer them the opportunity to grow inside the organization. The problem is that the country currently runs several big chipmaking projects simultaneously, but the talent pool is only so small. The Chinese chipmakers will eventually end up fighting among themselves for the next prospect.