Ex-TSMC engineer gets 10 years for trade secrets theft

Taiwan’s Intellectual Property and Commercial Court on April 27 sentenced former TSMC engineer Chen Li-ming to 10 years in prison.

The court found he illegally obtained and used trade secrets tied to the chipmaker’s 2-nanometer process for Tokyo Electron Taiwan, a local unit of Japan’s semiconductor equipment maker, in a ruling that can be appealed.

The court also gave TSMC engineers Wu Ping-chun and Ko Yi-ping prison terms of three years and two years, sentenced employee Chen Wei-chieh to six years, and gave Tokyo Electron Taiwan employee Lu Yi-yin a 10-month suspended sentence plus a NT$1 million (US$32,000) fine.

Prosecutors said Chen, who joined Tokyo Electron Taiwan after leaving TSMC, solicited confidential etching equipment data from Wu and Ko between late 2023 and early 2025.

The data was meant to help the supplier win more orders for advanced nodes.

Tokyo Electron Taiwan was fined NT$150 million (US$4.76 million), which can be suspended if it pays NT$100 million (US$3.17 million) to TSMC and NT$50 million (US$1.59 million) to the treasury.

The court said this was the first case to apply corporate liability under Taiwan’s National Security Act for national core technologies.

🔗 Source: Focus Taiwan

🧠 Food for thought

Implications, context, and why it matters.

The ruling against Tokyo Electron Taiwan centered on supervision lapses

Prosecutors did not claim Tokyo Electron Taiwan Ltd. directed or encouraged the theft. They centered the case on claims that the Taiwan unit did not properly oversee a former employee 1.
Authorities said the company lacked “concrete preventive controls” beyond broad internal rules. That made it liable for the employee’s actions involving the 2-nanometer chipmaking data in the case 2.
Authorities called this the first time a company was indicted under Taiwan’s National Security Act for alleged theft of National Core Key Technology, a legal category for strategically important technologies 1.

The case may raise compliance demands across the supply chain

The verdict places semiconductor equipment makers and material suppliers tied to designated “national core critical technologies” within Taiwan’s strategic security infrastructure. That brings tougher compliance demands 2.
After this ruling, suppliers may face tighter data protection terms from chipmaker customers. Some U.S. firms already expanded those contract sections from two pages to more than 30 2.
The case fits a wider pattern in Taiwan and the U.S. Semiconductor protection is increasingly treated as a national security matter, with scrutiny reaching suppliers and other intermediaries 3.