TAOYUAN, Taiwan -- The head of major Taiwanese memory chipmaker Nanya Technology on Friday warned that China's aggressive moves to foster its own chip capabilities could cause a serious supply glut and voiced concerns about Chinese companies' ongoing efforts to poach talent from other companies.

"We are worried that if China invests aggressively to build memory chip facilities and if they manage to license technology from key global chipmakers, the sector could go from healthy competition to cutthroat battles that could lead to out-of-control and disruptive outcomes," Lee Pei-Ing, president of Nanya Technology, told reporters at a press conference after the company's annual general meeting.

Taiwan's Nanya Technology is the global No. 4 maker of DRAM chips. (Photo by Cheng Ting-Fang)

Nanya Technology, an affiliate of Taiwan's largest industrial conglomerate Formosa Plastics Group, is the world's No. 4 maker of dynamic random access memory chips, trailing Samsung Electronics and SK Hynix of South Korea and Micron of the U.S.

DRAMs are used in a wide range of electronics, including PCs and smartphones.

Lee said that all global players are painfully aware of how overheated Chinese investments in other sectors, including displays, LEDs, solar panels and steel, led to oversupply.

"That is the reason most of the memory chipmakers are reluctant to license technologies to them," the executive said.

He added that Chinese memory makers may be able to disrupt market conditions in two years if they manage to license technology, but if not, they may take a very long time to catch up.

Lee's comments came as China's government-backed entities such as Hefei Chang Xin and Tsinghua Unigroup-controlled Yangtze River Storage Technology, known as Changjiang Storage, all aim to start making memory chips as early as 2018.

Meanwhile, Nanya Technology and its key partner Micron both have confirmed that Chinese rivals have been luring engineers away from their Taiwan operations.

Both companies are working with authorities to investigate whether their former employees are leaking technology to Chinese competitors.

President Lee Pei-Ing of Nanya Technology (Photo by Cheng Ting-Fang)

On Friday, Lee called on Chinese companies not to steal sensitive information from Nanya, though he conceded that it is inevitable that China will continue to poach engineers from Taiwan.

To retain its staff, Nanya Technology is raising compensation substantially for some 500 key engineers, Lee said.

The DRAM market looks stable in 2017, he said, and demand for the second half of this year should be more robust than in the first half.