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(Bloomberg) -- Taiwan is investigating whether a Chinese chip firm backed by US-based Synopsys Inc. is illegally poaching engineers from local giants including Taiwan Semiconductor Manufacturing Co., underscoring growing concern about Beijing’s economic ambitions.
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Agents raided the local offices of Advanced Manufacturing EDA Co. in March, acting on allegations that the Chinese chip design software firm was actively hiring away people from TSMC, the island’s Ministry of Justice Investigation Bureau said in a statement to Bloomberg News. District prosecutors in Hsinchu have decided to defer prosecution of two Taiwanese individuals associated with the firm known as Amedac, though that could change upon review, a spokesman for the prosecutorial office said.
Concerns are growing in Washington about whether American investments in China have been helping Beijing supercharge its semiconductor ambitions. The U.S. Department of Commerce is also probing Synopsys for possibly passing key technology to banned Chinese companies including Huawei Technologies Co.’s secretive HiSilicon unit, Bloomberg News has reported.
At the same time, Taipei sees the outflow of silicon engineers to Chinese companies as a key national security issue, and this year began to enforce regulations prohibiting Chinese firms from hiring away top-flight talent in sensitive sectors such as chips.
Representatives for Synopsys said it has a small stake in Amedac, adding that the company maintains a distributor relationship and hasn’t sold or transferred any technology to the Chinese firm. They declined to comment on the Taiwanese investigation. Amedac didn’t respond to calls placed to its main number and an email sent to a publicly listed address.
Read more: Synopsys Probed on Allegations It Gave Tech to Huawei, SMIC
Amedac is a 100 million yuan ($14.8 million) joint venture backed by Synopsys, according to its website. Its other backers include SummitView Capital, CEC Huada Electronic Design Co. and the Institute of Microelectronics of the Chinese Academy of Sciences, the government’s semiconductor research center. It is based in Hefei, the capital of the eastern Chinese province of Anhui, with offices in Shanghai and Beijing, according to the website.
Synopsys owns about 20% of the company, according to people familiar with the relationship and official registration data. The Chinese firm hasn’t yet registered its Taiwanese office with the local government, and regulations also ban Chinese companies from hiring in Taiwan without official approval, the bureau said in its statement.