On Nov. 1, the US Justice Department initiated a lawsuit against China’s state-owned Fujian Jinhua Integrated Circuit Co, Taiwan-based United Microelectronics Corp (UMC) and three Taiwanese individuals for allegedly conspiring to steal trade secrets from US semiconductor company Micron Technology. According to foreign media reports, UMC, which assisted Fujian Jinhua in developing DRAM technology, could be fined a maximum of US$20 billion. However, at a press conference on Jan. 29, Chinese Minister of Industry and Information Technology Miao Wei made the surprising statement that Fujian Jinhua does not possess its own technology and argued that UMC should be held responsible for any disputes concerning technology. Miao also said that Fujian Jinhua was an innocent party in the matter.
The minister’s comments raise two important points. First, although China does not currently possess semiconductor technology, it is looking to develop its own semiconductor industry. Beijing is obtaining this technology by several means, including buying up foreign companies, industrial espionage and using Taiwanese businesses or Taiwanese spies. Secondly, Beijing, as it so often does, disposes of Taiwanese companies once they cease to be useful, tossing them to one side and then pushing them under a bus to evade liability.
It just so happened that, on the very day that Miao was speaking, foreign media reported that the US Justice Department was considering dropping criminal charges against UMC and instead levying a large fine. The following day, Chinese officials moved to shift the blame onto UMC, potentially complicating matters for the latter, which might no longer be able to get away with simply paying the fine.
China’s treatment of Taiwanese businesses as disposable assets is nothing new. One wonders how many Taiwanese companies, large and small, have been buried alive, their factories snatched away, their markets seized, their capital or technology stolen, and even guarantees of personal safety removed. Before, Taiwanese businesses favored China for its low production costs; now, they are bullish about the massive size of China’s market, and are still investing in the country.
However the US-China trade war has now been upgraded to a “technology war.” As Taiwan’s semiconductor industry becomes increasingly reliant on the Chinese market, Taiwanese companies are placing themselves at an ever greater risk of being dragged into the war. Moreover, China is using Taiwanese businesses to obtain the technology it needs. If this causes Taiwan to lose its leading position in semiconductor technology, it will cause severe damage to Taiwanese industry and the national interest. The UMC case should serve as a warning. Taiwanese businesses should cautiously assess the situation and ask themselves whether they are willing to run the risk of becoming the next sacrificial lamb.
(Translated by Edward Jones, Taipei Times)
Industrial espionage, also known as economic espionage or corporate espionage, is the gathering of classified information and intelligence for commercial purposes, rather than on national security grounds. Industrial espionage often takes place at a company-to-company level, but can also be conducted at a national level by governments seeking to obtain a competitive advantage against the economies of other nations.
Industrial espionage can be carried out by systematically gathering open-source information such as patent filings or information and products on display at trade shows, but it can also involve other means such as infiltrating a company’s computer network or obtaining sensitive information from a company’s employees through coercion.
In 2007 Jonathan Evans, then-director general of MI5, the UK’s counter-intelligence service, sent confidential letters to 300 major UK banks, accounting and legal firms, warning of cyber attacks from Chinese “state organizations” in addition to a number of other countries, according to the Times newspaper. The Chinese government denies any involvement in industrial espionage.
(Edward Jones, Taipei Times)
1. semiconductor n.
半導體 (ban4 dao2 ti3)
2. toss ... to one side phr.
一腳踢開 (yi1 jiao3 ti1 kai1)
3. shift the blame phr.
卸責 (xie4 ze2)
4. increasingly adv.
與日俱增 (yu3 ri4 ju4 zeng1)
5. leading position phr.
領先地位 (ling3 xian1 di4 wei4)
6. serve as a warning phr.
殷鑑不遠 (yin1 jian4 bu4 yuan3)
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