The news hit Taipei like a typhoon: authorities were seeking the arrest of Pete Lau, CEO of OnePlus. For years, whispers of talent poaching had circulated, but now Taiwan was drawing a hard line. Would this move send shockwaves through the global tech landscape?
Taiwan just proved it’s not afraid to go after big names as it ramps up efforts to compete with China in the tech talent pool.
Taiwanese authorities have issued an arrest warrant for OnePlus CEO Pete Lau, accusing him of illegally recruiting dozens of Taiwanese engineers since 2014.
The move comes as Taiwan has been strengthening enforcement against Chinese companies that attempt to lure away its highly sought-after tech workforce. The AI boom has only intensified that pressure, elevating the island’s semiconductor industry and driving competition for its engineers. The Taiwan Semiconductor Manufacturing Company (TSMC) is now the world’s sixth-largest company by market capitalization and manufactures chips for tech giants like Nvidia and Apple.
With China and the U.S. locked in a heated technological arms race to develop more advanced AI systems, it’s little surprise that Chinese companies would turn to Taiwan as a prime source of talent.
In this case, Lau is accused of establishing a Hong Kong–based company called OnePlus Hong Kong and opening a Taiwanese branch of that company in 2015. That entity allegedly underwent some name changes and eventually hired around 70 engineers who worked on developing and testing software for OnePlus, according to Taiwan’s Central News Agency.
Authorities also accuse OnePlus of transferring more than $72 million (€66.2 million) to the Taiwanese company through a separate Hong Kong firm for what it described as “contracted research and revenue from selling research results.” Prosecutors say the money was used to recruit Taiwanese engineers, pay their salaries, and buy equipment for the business.
Taiwanese authorities argue the arrangement violated the Act Governing Relations Between the People of the Taiwan Area and the Mainland Area, which requires Chinese companies to receive government approval before hiring locally. Two Taiwanese citizens were also indicted in connection with the alleged scheme.
“OnePlus business operations continue as normal and are unaffected,” a OnePlus spokesperson told Gizmodo in an emailed statement.
This makes Lau one of Taiwan’s more high-profile targets. He co-founded OnePlus in 2013, and the company has since grown into one of China’s most prominent smartphone brands.
But this isn’t the first time Chinese companies have come under scrutiny from Taiwanese authorities. Throughout last year, Taiwan investigated dozens of Chinese firms over similar alleged schemes.
In March, Taiwanese authorities accused China’s top chipmaker, SMIC, of opening a branch in Taiwan while posing as a Samoa-based company in an effort to hire local talent. Taiwan ultimately blacklisted SMIC, requiring companies in Taiwan to obtain government licenses before shipping products or services to the company.
The AI Gold Rush: Why Taiwan’s Talent is So Coveted
Imagine a crowded marketplace, overflowing with precious metals. That’s Taiwan’s tech sector right now. The island nation’s prominence in semiconductor manufacturing, especially through TSMC, makes its engineers highly sought-after. The global surge in AI development only amplifies this demand.
Taiwan’s semiconductor industry is now a critical piece of the global technology puzzle. As the world’s sixth-largest company by market capitalization, TSMC manufactures chips for major players like Nvidia and Apple. This concentration of expertise makes Taiwan a prime target for companies seeking to accelerate their AI and tech capabilities. Competition is fierce, and the stakes are incredibly high.
OnePlus Under Scrutiny: Details of the Alleged Scheme
The documents paint a detailed picture: Pete Lau, co-founder of OnePlus, stands accused of orchestrating a scheme to recruit Taiwanese engineers without the necessary government approvals. Since 2014, authorities claim, Lau established a Hong Kong-based company, OnePlus Hong Kong, and then opened a Taiwanese branch in 2015.
This Taiwanese entity, prosecutors say, went through several name changes and eventually hired around 70 engineers to work on software development and testing for OnePlus. The alleged scheme also involved the transfer of over $72 million (€66.2 million) through a separate Hong Kong firm to fund the recruitment, salaries, and equipment for the Taiwanese operation. All of this, according to Taiwanese authorities, violates the Act Governing Relations Between the People of the Taiwan Area and the Mainland Area.
What laws did OnePlus allegedly violate?
Taiwanese authorities assert that OnePlus violated the Act Governing Relations Between the People of the Taiwan Area and the Mainland Area. This law stipulates that Chinese companies must obtain explicit government approval before engaging in local hiring practices in Taiwan. The core issue isn’t simply about hiring talent; it’s about adhering to the legal frameworks designed to regulate cross-strait relations and protect Taiwan’s strategic interests.
A Broader Crackdown: Taiwan’s Stance Against Illegal Recruitment
The case against Pete Lau is not an isolated incident. Over the past year, Taiwan has intensified its scrutiny of Chinese companies suspected of poaching its tech talent. This crackdown reflects a broader concern about the erosion of Taiwan’s competitive advantage in the face of aggressive talent acquisition strategies from across the strait.
Back in March, China’s top chipmaker, SMIC, faced similar accusations, accused of attempting to circumvent regulations by operating under the guise of a Samoa-based company. The end result? SMIC was blacklisted, forcing Taiwanese companies to secure government licenses before conducting business with the Chinese firm. It’s a high-stakes game of cat and mouse, with Taiwan determined to protect its technological crown jewels.
What other companies have been investigated for tech poaching?
Beyond OnePlus and SMIC, Taiwanese authorities have investigated numerous other Chinese firms for similar alleged schemes. While specific names are often withheld due to ongoing investigations, the scope of the crackdown indicates a widespread effort to curtail illegal talent recruitment practices. These investigations often involve accusations of establishing shell companies, misrepresenting business activities, and illegally transferring funds to attract Taiwanese engineers.
The Talent War: What’s Next for Taiwan and China?
This situation is a warning shot. Taiwan is sending a clear message: it will defend its talent pool and enforce its regulations against those who attempt to circumvent them. The island understands that its tech workforce is a strategic asset.
For China, the implications are equally significant. The pursuit of technological self-sufficiency is a national priority, and access to skilled engineers is critical to achieving that goal. However, this incident highlights the potential risks and challenges of pursuing talent acquisition through methods that are perceived as illegal or coercive. As the tech rivalry between the U.S. and China intensifies, expect Taiwan to play an increasingly pivotal role. It’s a strategic chess match, and the next move is anyone’s guess. Will other nations follow Taiwan’s aggressive approach to protecting their intellectual capital?