Huawei Targets Chip Equipment Supplier Employees With 3x Salaries To Skirt US Sanctions

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With US and Western sanctions against its advanced chip manufacturing efforts weighing heavily, China is allegedly stepping up efforts to poach employees from key chip manufacturing equipment providers such as ASML and its suppliers. ASML’s advanced extreme ultraviolet (EUV) scanners are one-of-a-kind machines indispensable for manufacturing high-end advanced semiconductors.

According to a fresh report in the Wall Street Journal, Chinese efforts to scoop up employees from ASML’s key supplier Zeiss have intensified to an extent that Germany’s domestic intelligence authorities have become involved. Zeiss’ lenses are essential to making ASML’s machines that manipulate ultraviolet light to an extent to allow it to print nanometer sized circuits on a silicon wafer to manufacture a chip.

Huawei Offers Zeiss Employees 3x Salaries To Entice Them To Jump Ship

Multiple reports have suggested that China’s plans to manufacture advanced chips have run into a roadblock due to US and Dutch sanctions targeting ASML’s advanced machines. American sanctions against China’s largest technology company, Huawei, started during the Trump Administration when Huawei was prevented from procuring advanced 7-nanometer chips from the Taiwan Semiconductor Manufacturing Company (TSMC).

These sanctions were expanded by the Biden Administration to prevent ASML from selling its advanced EUV machines to China, with the Dutch government also implementing similar restrictions.

The restrictions have forced China’s largest contract chip manufacturer, the Semiconductor Manufacturing International Corporation (SMIC), to use older chip machines to try to manufacture 7-nanometer chips consistently. Chip manufacturers can only achieve this via a manufacturing technique called multi-patterning, where the manufacturer splits a design into portions to print the circuits on a wafer individually. Multi-patterning increases manufacturing complexity and reduces product quality along with increasing the number of steps the smaller the feature sizes get.

Now, according to a report in the Wall Street Journal, Huawei has stepped up efforts to try and recruit employees from key ASML supplier Zeiss. Zeiss, a German company, is known for manufacturing advanced lenses that are key to manipulating light for semiconductor fabrication. It first discovered Huawei’s attempts to poach employees last year, with the Journal’s sources claiming that Zeiss employees with access to sensitive proprietary information were being targeted. The publication adds that German intelligence officials investigated these efforts, and the investigation is currently ongoing.

These purported efforts by Huawei are the latest in the firm’s efforts to develop chip manufacturing machines in response to Western sanctions against it. Developing these machines is key to the firm’s survival, as without access to 7-nanometer or advanced chips, it cannot compete in the global personal computing and consumer electronics industries. Its rivals, such as Apple and Samsung, have access to the most advanced processors, with Apple’s latest iPhone lineup featuring 3-nanometer chips that are years ahead of the 7-nanometer products in Huawei’s products.

Chinese chip manufacturer SMIC came into the limelight in 2021 when former TSMC and Samsung executive Dr. Liang Mong-song threatened to resign from the firm. His decision followed SMIC’s decision to hire rival Chiang Shang-yi, a former colleague of Dr. Liang at TSMC. Back then, SMIC had hoped to access EUV machines to manufacture 5-nanometer chips, but its hopes were dashed due to subsequent American sanctions.

China is going after technology workers around the world to steal intellectual property build its semiconductor industry, and the West is freaking out, the WSJ reports. For example, China’s Huawei offered to triple salaries to poach Zeiss employees via LinkedIn headhunters. Zeiss…

— Dan Nystedt (@dnystedt) November 28, 2024