One of the challenges that Chinese companies have with developing their own chipmaking gear is the lack of experienced professionals in fields as high-end lithography and optics. As Chinese companies, such as Huawei, want the best, they are aggressively recruiting people from ASML and Zeiss SMT, offering plenty of money in exchange for their world-class knowledge and experience, reports the Wall Street Journal.
Huawei approached employees at Germany's Zeiss SMT, which produces optics for ASML's lithography tools, offering up to triple their salaries. This has raised serious concerns in the U.S., Europe, and Asia over intellectual property theft and national security risks, triggering investigations and regulatory actions. German intelligence began investigating after Zeiss employees flagged these efforts, fearing that sensitive technological knowledge could be compromised. Huawei was also found targeting other German firms like Trumpf, which develops laser amplifiers for chip production.
Two years ago, the U.S. government obliged U.S. citizens and green card holders to apply for a license if they wanted to work in the Chinese semiconductor sector on certain products, which caused some brain drain from companies like AMEC, Huawei, and Naura (which has reportedly started to develop its own litho tools), which are particularly instrumental in building China's chipmaking tools prowess. As a result, Chinese entities accelerated their headhunting in Europe. ASML and its suppliers, including Zeiss, are key targets. Huawei and other Chinese firms have hired dozens of engineers with expertise in advanced optics and lithography, with some reportedly bringing trade secrets to Chinese entities.
Countries like Taiwan, South Korea, and the U.S. have acted to counter such recruitment. Taiwan has investigated about 90 cases of poaching since 2020 and imposed strict penalties, including up to 12 years in prison, for leaking critical semiconductor technology. South Korea has intensified punishment for unauthorized tech transfers (though its punishments are not that strict), targeting former employees who assist Chinese companies in replicating sensitive technologies.
Despite controls, engineers in Asia, Europe, and even the U.S. remain relatively open to recruitment by Chinese firms. This enabled companies like Huawei to persistently contact engineers, sometimes through intermediaries or local ventures that obscure their Chinese origins. These efforts are called 'spray and pray' strategies as they involve mass outreach in the hope of securing a few successful hires. As China-based chipmaking tool makers are often funded by the country's government, they can offer salaries far beyond what Western firms can pay, so their head-hunting makes a lot of sense.
While many engineers decline these offers due to reputational risks and cultural concerns, some accept, often transferring valuable expertise and trade secrets. One case involved three employees from California-based FemtoMetrix, whose departure and subsequent data theft nearly destroyed the company, according to WSJ.
Governments are grappling with how to regulate this practice. For example, Taiwan has banned domestic firms from acting as fronts for Chinese recruiters. However, broader measures to limit recruitment face challenges, partly due to concerns about overregulating business activities.
