Taiwanese prosecutors have charged three people in the country’s first-ever indictment over the alleged theft of trade secrets tied to Taiwan Semiconductor Manufacturing Co.’s (TSMC) cutting-edge 2-nanometer chip technology, underscoring efforts to shield the island’s crown-jewel semiconductor industry from foreign leaks.
The High Prosecutors Office announced Wednesday that it is seeking a combined total of 30 years of prison time against the defendants under the National Security Act. The case is the first to invoke Taiwan’s revised security law and newly established “National Core Technologies List,” which aim to prevent strategic technologies from leaving the country.
One of the accused, identified only by the surname Chen, previously worked as an engineer at TSMC before joining Tokyo Electron, Japan’s top chip equipment supplier. Prosecutors allege Chen used his ties with former TSMC colleagues to illicitly obtain proprietary files on the company’s 2-nm process technology. He allegedly photographed and reproduced confidential documents to help Tokyo Electron improve its etching machines and secure supplier status in TSMC’s most advanced production lines.
“Despite being fully aware of TSMC’s strict confidentiality measures, Chen repeatedly sought classified information from employees with access to core national technologies,” prosecutors said in a statement.
Authorities are recommending a 14-year sentence for Chen, nine years for a former TSMC employee surnamed Wu, and seven years for another surnamed Ge. A fourth individual, surnamed Liao, was investigated but not indicted.
The investigation revealed 12 pages of classified trade secrets tied to core Taiwanese semiconductor technologies, according to TSMC. The company stressed in a statement that it maintains a “zero-tolerance policy” toward any violation of trade secret protections.
Tokyo Electron confirmed it has dismissed an employee linked to the case, while TSMC itself referred the matter to prosecutors. The indictment follows earlier reports that several TSMC employees had been fired over possible trade secret leaks.
The case has drawn global attention as TSMC prepares to ramp up production of its next-generation 2-nm chips this year. These chips represent the most advanced semiconductors to date, with applications in artificial intelligence, high-performance computing, and defense systems.
Taiwan amended its National Security Act in 2022 to strengthen protection of sensitive technologies amid growing U.S.-China rivalry over semiconductor dominance. The law classifies integrated circuits more advanced than the 14-nm node as “national core technologies,” making unauthorized use or disclosure a criminal offense.
