Export Controls Evasion: How China Acquires Taiwanese Semiconductor Expertise
When walls have leaks: Building higher technological barriers may simply inspire cleverer workarounds
In today's fragmenting global landscape, export controls on advanced AI chips remain a critical yet porous defense against China's expanding digital authoritarianism. Recent research by Secdev Information Controls Fellow Chiang Min-yen reveals sophisticated "remote poaching" strategies that Chinese companies employ to circumvent these restrictions.
Uncovering "Remote Poaching"
Chiang's year-long investigation, supported by the Open Technology Fund, documents how companies like Bitmain have created shadow networks to acquire Taiwanese semiconductor expertise while bypassing regulatory scrutiny. This research comes at a crucial moment following revelations that TSMC chips were found in Chinese AI products, violating U.S. export controls.
"How could such violations occur despite TSMC's apparent compliance with regulations?" Chiang asks in his report. The answer lies in what he terms "remote poaching" - a multi-layered approach where Chinese companies establish Taiwanese entities and offshore hiring networks to access talent and technologies without formal detection.
The Bitmain Playbook
Chiang's research reveals Bitmain's two primary methods for bypassing restrictions:
Direct Operations: Establishing "IC Link" in Taiwan to recruit local tech talent, leading to warnings from MediaTek about aggressive recruitment practices.
Remote Utilization: Creating relationships between Chinese companies like "Beijing Jingshi" and Taiwanese entities like "WiseCore Tech" to place orders with TSMC while leveraging Taiwanese expertise remotely.
These tactics allowed Bitmain and its affiliates, particularly Sophgo, to continue accessing advanced semiconductor technology despite increasing restrictions from both U.S. and Taiwanese authorities.
Fueling Digital Authoritarianism
What makes these findings particularly concerning is how these acquired technologies power China's surveillance infrastructure. Sophgo's website reveals numerous projects aligned with China's "smart cities" strategy across multiple provinces - a framework inseparable from authoritarian control.
Chiang documents how Sophgo provides generative AI content-moderation tools already deployed across Beijing, Guangdong, Henan, Qinghai, Jiangsu, and Zhejiang - directly enabling state censorship capabilities.
Implications for Global Security
As global tech supply chains continue fragmenting along geopolitical lines, understanding circumvention methods becomes increasingly vital for effective policy. Chiang's research demonstrates that export controls alone may prove insufficient without addressing sophisticated evasion strategies.
Download the full report here:
https://dset.tw/wp-content/uploads/2024/08/The-Remote-Poaching-Model-2.pdf