Taiwanese authorities have raided the offices of two recruitment companies that allegedly broke the law in poaching local talent for a mainland Chinese AI chip maker, accusing the headhunters of undermining the local semiconductor industry, reports South China Morning Post. The raid hit offices of WiseCore Technology and IC Link, recruitment companies that have headhunted hundreds of chip experts over the past three years through a joint venture with a mainland Chinese chip maker, the prosecutors’ office in New Taipei district said. A total of 19 people were brought in for questioning for allegedly breaching the ‘Act Governing Relations Between the People of the Taiwan Area and the Mainland Area’, a law designed to protect the interests of the self-ruled island, including those of its hi-tech industry. The individuals are being questioned for breaking rules that govern mainland investment into Taiwan’s chip industry, which requires permission from Taiwan’s Investment Commission.

The two recruitment firms under investigation offered to more than double the salary of semiconductor talent from Taiwan companies such as MediaTek and MStar, if they took up similar jobs in mainland China. The semiconductor industry is now the pillar of Taiwan’s economy, contributing 15% of total GDP in 2020, while it is a weak link in mainland China’s hi-tech supply chain.