Taiwan law to prevent China from stealing its chip tech

On Thursday (Feb 17), Taiwan’s government proposed a new law to prevent China from stealing its chip technology, amid rising concern in Taipei that Beijing is stepping up its economic espionage.

Taiwan’s Cabinet approved draft amendments to the National Security Act that would make it a crime to engage in “economic espionage” or the unapproved use of critical national technologies and trade secrets outside of Taiwan. Sentences would be set at up to 12 years and 10 years in jail, respectively.

In addition, any individuals or organizations that have been entrusted or subsidized by the Taiwanese government to conduct operations involving critical national technologies will have to receive government approval for any trips to China, according to the draft regulations. Failing to do so could incur a fine of between 2 million and 10 million New Taiwan dollars ($71,000 and $358,000).

“High-tech industry is the lifeline of Taiwan. However, the infiltration of the Chinese supply chain into Taiwan has become serious in recent years,” Lo Ping-cheng, minister without portfolio and spokesperson for the Executive Yuan, said at a news conference on Thursday. “They are luring away high-tech talent, stealing national critical technologies, circumventing Taiwan’s regulations, operating in Taiwan without approval and unlawfully investing in Taiwan, which is causing harm to Taiwan’s information technology security as well as the industry’s competitiveness.”

Lo said the administration of President Tsai Ing-wen sees an urgent need to amend the law to establish a more complete national security front line and stop such “unlawful actions.”

Using chip giant TSMC’s most advanced 2-nanometer chipmaking technology as an example, Lo said such technology could be deemed vital to Taiwan’s security under the new law, and thus extra protection was needed for it, in addition to existing laws on trade secrets.

“Everyone knows that TSMC has world-leading technologies,” Lo said. “If their technologies were stolen there would be a significant impact.”

A designated court for economic espionage crime would be established to speed up trials, Lo added.

CT Bureau