Chinese companies are quietly pulling engineers out of Taiwan's chip industry to close the AI gap, which is bad news for Taiwan's biggest strategic asset and for the West's control of advanced chips.

• Chinese firms are offering Taiwanese chip engineers triple the going salary to jump ship, then taking company secrets with them.
• Because Taiwan bans this kind of recruiting outright, it runs through shell companies and front men, often from a science park in Hsinchu.
• Seventeen Chinese companies are under investigation for illegal poaching, but each hole plugged opens another.
• Smuggling is part of it too: in March, someone allegedly tried to route $2.5 billion of Nvidia AI gear to China through Taiwan and Southeast Asia.
• Taiwan still leads China by about five years on the most advanced chips, and that lead is a big reason the U.S. keeps guaranteeing its security.

Outlook: Expect more prosecutions and tighter export policing in Taiwan, with the open question being how long its "silicon shield" lead can hold.