Taiwan prosecutors have charged three individuals with allegedly stealing trade secrets from Taiwan Semiconductor Manufacturing Co. (TSMC), seeking prison sentences of at least seven years.

One of those charged is a former TSMC employee who later worked at Japanese chip equipment maker Tokyo Electron, and prosecutors are seeking a 14-year sentence for this person.

Prosecutors allege the former employee persuaded ex-TSMC colleagues to share confidential technology, leading to indictments for two others.

Authorities say the accused intended to use TSMC’s proprietary technology outside Taiwan and to support Tokyo Electron’s etching equipment, aiming to secure TSMC’s certification for 2-nanometer chipmaking processes.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ Semiconductor trade secret theft follows recurring patterns despite heightened security

The current TSMC case represents part of a documented pattern of intellectual property theft targeting Taiwan’s semiconductor industry.

A former TSMC engineer named Zhao was charged in 2017 for stealing trade secrets intended for Shanghai Huali Microelectronics, including critical 5nm, 16nm, and 10nm manufacturing processes 2.

Another TSMC employee surnamed Wu was indicted in 2018 for stealing 28-nanometer process technology to take to CSMC Technologies in China 3.

The scale of this talent migration is substantial. Approximately 3,000 Taiwanese engineers now work in Chinese semiconductor firms, often in senior research and development roles 2.

These cases demonstrate that despite Taiwan’s legal framework and TSMC’s security measures, the company remains a persistent target due to its dominance in advanced chip manufacturing.

2️⃣ Equipment supplier relationships create unexpected security vulnerabilities

The involvement of Tokyo Electron highlights how critical supplier relationships can become attack vectors for trade secret theft.

Tokyo Electron ranks among the world’s largest chipmaking equipment manufacturers alongside Applied Materials and Lam Research, supplying essential etching, coating, and processing machines to TSMC, Samsung, and Intel 1.

According to prosecutors, the accused engineer Chen attempted to steal TSMC technology specifically to help Tokyo Electron improve its etching equipment and gain certification for cutting-edge 2-nanometer chip manufacturing processes 1.

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