TAIPEI -- It's a growing truism that China is sucking a swelling stream of investment and technology from its longtime political rival across the Taiwan Strait. But now it is also spiriting something more precious away from the island: its brainpower.

Consider Dun Jowei. Until last November, the 48-year-old engineer was helping start up a cutting-edge plant in Taiwan for Taiwan Semiconductor Manufacturing Corp., the world's biggest contract maker of semiconductor chips. Then he jumped ship, or strait, to Shanghai, to run a chip plant, or fab, for an upstart rival to TSMC. Along with Mr. Dun went 150 engineers from TSMC and a host of other top-name producers in Taiwan.

"I think I knew all of these 150 people [in Taiwan]. Some are classmates, or classmates' younger brothers, or their classmates," says Mr. Dun, who is plant director for Semiconductor Manufacturing International Corp., or SMIC, a Shanghai company set up last year by a group of Taiwanese executives. "People are very happy here. With a Taiwanese pay scale, we can enjoy a high standard of living."

From chip engineers to financial analysts, an expanding pool of talented and well-trained Taiwanese professionals see their future in China. Drawn by the glint of opportunity in one of the world's biggest and fastest growing economies, while at the same time frightened by the travails of Taiwan's flailing domestic economy, young professionals are moving to China in ever greater numbers.

Many of them, moreover, have only vague intentions of returning to Taiwan. Some analysts and executives worry they are taking with them the economically beleaguered island's best hope for the future: its pool of human talent. That, in turn, could make it even more difficult for Taiwan to propel its economy up the economic ladder as it copes, on the one hand, with China's compellingly cheap manufacturing labor force and, on the other hand, with the creative skills of Europe and America's increasingly dominant Internet and biotech entrepreneurs.

"You've got something here that is going to make it very difficult for Taiwan to get back to the kind of growth its used to," says John Pickles, who heads Asian Pacific Research Ltd., a Taipei-based economic consultancy. He notes that the current trend darkly mirrors a more auspicious migration in the 1980s and 1990s: that of well-trained Taiwanese engineers returning from jobs with big U.S. companies to set up shop in Taiwan.

The flow of people to China is not entirely new, of course. Taiwanese have been seeking their fortunes in China for years, ever since the island's government first allowed its citizens to cross the Strait in 1987. But in the past those flocking to southern China were mainly small-time entrepreneurs, setting up shoe and toy factories or opening restaurants and karaoke bars. Now, by contrast, it is Taiwan's best and brightest who are decamping.

At one level, the migration of human talent is part of the rapid acceleration in business ties between Taiwan and China. Taiwan's high-powered Economic Development Advisory Committee recommended in August that Taiwan President Chen Shui-bian scrap many of the government's limits on corporate investment in China. Despite his perceived anti-China bias, Mr. Chen quickly endorsed the recommendations. Taiwan companies, which have already collectively invested US$50 billion or more in China (estimates vary), are now stepping up their mainland investments.

To be sure, many of the engineers and other trained executives who have moved to Taiwan are working for such companies. Yet a growing number of Taiwanese executives are also moving to companies that have little or no formal connection to Taiwan. The clearest examples of this are the two new semiconductor companies started in Shanghai last year. Both have only oblique formal connections to Taiwan: one was started by Winston Wong, the estranged son of one of the island's biggest industrialists; the other by Richard Chang, formerly an executive at a Taiwan chip maker that TSMC acquired last year. Though both men have personal ties to Taiwan, the companies themselves are owned by a scattering of entities from Japan, the U.S., and China, with only minimal official investment from Taiwan.

For Mr. Dun, who earned his PhD at the University of Michigan before embarking on a 16-year career in the chip industry, the reasons to move across the strait were clear. "Two things," he says in a lengthy telephone interview while riding a Shanghai train from the city to his suburban apartment. "One is the future growth potential for the whole industry. Number two is personal growth opportunities. I figure both ways there's much more opportunity in Shanghai." In fact, Mr. Dun says, the market in China is proving even more robust than expected. When he joined SMIC a year ago, the company was expecting to get just 10% of its sales in the domestic Chinese market. Now it expects half.

The inconveniences of daily life in Shanghai are trivial, adds Mr. Dun. The biggest frustration for him and his colleagues, he says, is that Chinese tax rules make it prohibitively expensive for them to buy cars. So they bike the 20 minutes to work, and ride the train or taxis -- at half the rates of Taiwan -- to downtown Shanghai. The engineers live in a company-built apartment block with ample amenities about 30 minutes from the city center.

Moreover, Mr. Dun says his family loves Shanghai. His teenage daughter has fast made friends in her first year of high school at the Shanghai American School, and has quickly learned to bargain for cellphone accessories in Shanghai's cheap and ubiquitous markets. SMIC allows its Taiwanese employees to fly back to the island four times a year. But, asked if he plans to move back to Taiwan permanently, Mr. Dun is ambiguous. "It's hard to say. Eventually, maybe. But in the next five years, probably not."

Most of Mr. Dun's colleagues are younger, in their mid-thirties, he says. Many of their children study at a company-built primary school that teaches them English, and Chinese using the simplified characters of the mainland. Still, Mr. Dun says most of his colleagues, even some of those who are considered native Taiwanese (Mr. Dun's parents were born in China), are willing to make the sacrifices. "Many of the people I recruited are around 35 (years old), and their generation thinks far ahead, for their children. So they don't mind moving to China . . . for their children to have a future here," he says.

The increasing allure of the mainland is evident not only in the attitudes of the people leaving Taiwan's tech companies for China, but also in those left behind. TSMC Chairman Morris Chang, one of the island's most revered business executives, says his company will start business in China as soon as he possibly can. In September, Mr. Chang named TSMC's first representative to China, to be based in Shanghai.

For now at least, the loss of engineering talent to China is not the biggest worry for Taiwanese chipmakers, who are busy coping with a devastating drop in global IT demand, but it may become so. Some 50 former TSMC engineers now are working for rivals in Shanghai, but that only amounts to a trickle at a company where a quarter of its more than 14,000 employees are equipped with masters degrees. "Right now it is a small problem," says Frank Wen, general manager at UMC. Mr Wen says around 20 of UMC's roughly 3,000 engineers have left for Shanghai. "The big question is, will it become a big problem? I hope not."

-- Messrs. Dean and Uimonen are reporters in The Asian Wall Street Journal's Taipei bureau.