TSMC Trade Secrets Theft: Taiwan Charges 3 in IP Case

Taiwanese prosecutors have charged three individuals in a major trade secrets theft case involving Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s leading chipmaker.

Authorities allege that a former TSMC employee, who later joined Tokyo Electron, persuaded ex-colleagues to share confidential semiconductor technology. The prosecutor’s office is seeking a 14-year prison sentence for the ex-employee and at least seven years for the two others charged. The stolen information was reportedly intended to help Tokyo Electron improve its etching equipment and gain certification for 2-nanometer chipmaking processes, a highly competitive frontier in semiconductor manufacturing.

Key Highlights

• Ex-TSMC employee accused of stealing secrets for Tokyo Electron
• Case linked to 2nm chip technology certification and etching tools
• Highlights supplier-related risks in semiconductor IP security

Tokyo Electron is one of the world’s largest chip equipment suppliers, alongside Applied Materials and Lam Research, and works closely with major chipmakers including TSMC, Samsung, and Intel.

This case underscores ongoing risks to Taiwan’s semiconductor industry. Similar incidents have occurred in the past: in 2017, former TSMC engineer Zhao was charged for attempting to transfer advanced process technology to Shanghai Huali Microelectronics, while in 2018, another employee surnamed Wu was indicted for trying to take 28nm process knowledge to CSMC Technologies in China.

Also Read: TSMC to Build 4 New Fabs for 2nm & 1.4nm Chips by 2028

Industry analysts note that around 3,000 Taiwanese engineers now work in Chinese semiconductor firms, often in senior R&D roles, reflecting a pattern of talent migration and knowledge leakage. The latest case highlights vulnerabilities in the global semiconductor supply chain, showing how supplier relationships can become security risks. Experts warn that chipmakers must strengthen protections not only for internal staff but also for external partners with access to sensitive data.