Taiwan Prosecutors Charge 3 People for Allegedly Stealing TSMC Trade Secrets

TAIPEI, Taiwan—Local prosecutors have indicted three individuals for allegedly stealing trade secrets from Taiwan Semiconductor Manufacturing Co., Ltd. (TSMC) to help a Japanese equipment supplier secure more orders from the world’s largest contract chipmaker.

The case marks the first time Taiwan’s National Security Law has been used to prosecute the theft of what are considered Taiwan’s national core technologies, according to prosecutors.

“This case involves core technologies that are the lifeline of [Taiwan’s] industries and seriously threatens the international competitiveness of its semiconductor industry,” prosecutors wrote, according to a translation of the original text.

Among those charged was a former TSMC employee—identified only as a former yield engineer surnamed Chen—for whom prosecutors are seeking a 14-year prison sentence. After leaving TSMC, Chen joined Tokyo Electron, a Japanese supplier of chipmaking equipment, where he worked in the marketing department.

Prosecutors alleged that Chen repeatedly asked individuals still working at TSMC to obtain proprietary chip production information, to help his new company boost equipment sales to his former employer.

Two of those individuals—identified only by their surnames, Wu and Ko—allegedly aided Chen by providing him with information to photograph. Prosecutors are seeking prison terms of nine years for Wu and seven years for Ko.

The TSMC information that Chen allegedly obtained was used to improve Tokyo Electron’s etching tools that could be used in TSMC’s 2-nanometer (nm) production lines, according to prosecutors.

Etching tools typically utilize reactive gases or plasma to selectively remove specific materials during the chipmaking process.

As semiconductor chips become smaller, they typically become more efficient and can run faster while using less power. To meet the growing demand for computing power, chips need to pack in more transistors, which requires increasing their density.

Prosecutors noted that Chen, having previously worked at TSMC, should be familiar with the company’s various confidential information protection measures, as well as its strict requirements for suppliers to adhere to confidentiality agreements.

TSMC reported the case to the High Prosecutors’ Office’s Intellectual Property Branch on July 8, after detecting unusual activities and conducting an internal investigation, according to the press release.

Another three individuals initially arrested in connection with the case were not charged, prosecutors said.

Focus Taiwan, the English-language arm of Taiwan’s national news agency, Central News Agency, reported on Aug. 28 that Tokyo Electron has since fired Chen, and Ko has resigned from TSMC.

The Epoch Times could not independently verify those claims.

The defendants’ legal representation could not be reached for comment.

TSMC told media outlets in an emailed statement that it has a zero-tolerance policy toward any actions that compromise the protection of trade secrets or harm the company’s interests, and that it is committed to “safeguarding our core competitiveness.”

“Such violations are dealt with strictly and pursued to the fullest extent of the law,” TSMC stated. “To ensure this, we will continue to strengthen our internal management and monitoring systems and will work closely with relevant regulatory authorities as necessary to protect our competitive advantage and operational stability.”

The Epoch Times contacted TSMC for additional comment but didn’t receive a response by publication time.

The communist regime in China says Taiwan is a “renegade province” waiting to be “reunited” with the mainland, even though the self-ruled island is a de facto independent nation.

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