What Taiwan Can Teach South Korea About China's Chip Tech Theft

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Police figures show the scale of the concern. Of 33 overseas technology-leak cases detected in 2025, 18 involved China, or 54.5%. The cases extended beyond semiconductors to displays, batteries and other strategic industries.

China also sought technology through acquisitions. But foreign-investment scrutiny narrowed that route. In 2021, Chinese-backed Wise Road Capital's proposed $1.4 billion acquisition of South Korean chipmaker Magnachip collapsed after regulatory intervention.

Recruiting engineers and obtaining confidential files can be cheaper and harder to screen in advance than buying an entire company.

Seoul is addressing another possible loophole. On October 19, its government announced plans to expand reviews of foreign acquisitions conducted through locally incorporated entities.

The proposal is important, but screening ownership alone cannot uncover every channel through which technical knowledge moves.

Taiwan's experience offers practical lessons

Taiwan has confronted Chinese companies operating recruitment networks without the required authorization. Its Investigation Bureau formed a specialized team in late 2020.

In March 2026, authorities investigated 11 Chinese companies suspected of illicitly recruiting high-tech workers through disguised ownership structures or unauthorized offices.

Another operation targeting 17 companies followed in July and August. Investigators identified alleged use of nominally Taiwanese firms, intermediary recruiters and sham staffing arrangements.

The risks also arise inside companies. In August, Taiwanese prosecutors charged a senior Nanya Technology engineer who allegedly hid a camera among snacks to record 32 confidential process-related files while pursuing employment opportunities in China.

Company security personnel detected suspicious wireless signals and examined access logs and computer records to uncover the alleged theft.

Taiwan's response combines recruitment enforcement with criminal law. Amendments to the National Security Act introduced economic-espionage offenses involving nationally critical technologies, carrying potential prison sentences of five to 12 years and fines of up to NT$100 million ($3.1 million).

The approach recognizes that some technology theft threatens national economic security, not merely a company's balance sheet.

Stronger enforcement needed

South Korea made an important change on September 13, 2026, when its expanded espionage law took effect.

Previously focused on espionage benefiting an enemy state, effectively North Korea, the law now covers foreign countries and comparable organizations.

Yet investigators still face demanding questions about foreign direction and whether the information qualifies for espionage protection.

Punishment under existing technology-protection laws has also raised concerns. Citing figures from the Korea Enterprises Federation, a September editorial reported that 70% to 80% of convictions for technology-related offenses resulted in suspended sentences, with an average prison term of one year and nine months.

Stronger legislation matters little if enforcement cannot reach the organizations financing illicit transfers. Taiwan's experience points to three priorities for Seoul.