TSMC Faces Security Crisis as Employees Charged with Stealing Advanced Chip Technology

Taiwan Semiconductor Manufacturing Company (TSMC), the world’s leading semiconductor foundry, is confronting a significant security breach that has raised concerns about client confidence. Three company employees stand accused of stealing highly sensitive 2-nanometer chip technology, marking the first application of Taiwan’s National Security Law in a case involving critical technological assets.

Severe Legal Consequences for Alleged Industrial Espionage

Prosecutors in Taiwan filed serious charges on August 27 against three TSMC staff members. The case centers on former engineer Chen Li-ming, who had transitioned to a Taiwanese subsidiary of Japanese equipment manufacturer Tokyo Electron. He allegedly collaborated with current TSMC employees Wu Ping-chun and Ko Yi-ping to appropriate proprietary information related to groundbreaking 2-nanometer semiconductor technology.

The potential prison sentences reflect the severity of the accusations. Chen faces up to 14 years imprisonment, while Wu and Ko could receive 9 and 7 years respectively. This landmark case represents a new legal approach to protecting critical technologies through national security legislation.

Japanese Equipment Maker Implicated in Scheme

Investigators revealed that Chen apparently leveraged his connections with former TSMC colleagues to obtain confidential documents. The objective was reportedly to secure additional equipment contracts with Tokyo Electron for TSMC’s advanced 2-nanometer etching processes. Notably, Tokyo Electron had received an excellence award from TSMC in 2024, but promptly terminated Chen’s employment once the allegations surfaced.

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Company Discovers Breach Through Routine Monitoring

TSMC’s internal security systems detected suspicious activity on July 8 during standard monitoring procedures. Irregular file access patterns triggered an investigation that uncovered unauthorized handling of trade secrets related to the 2-nanometer process technology. This advanced manufacturing method, scheduled for mass production launch in late 2025, represents the next frontier in semiconductor innovation.

The chip manufacturer has responded with stringent measures, implementing a zero-tolerance policy toward security violations and initiating disciplinary actions against involved personnel. The company has committed to strengthening its internal protection systems to prevent future incidents.

Broader Implications for National Security and Technological Leadership

This case extends beyond conventional corporate espionage concerns. Taiwanese authorities have classified the stolen 2-nanometer technology as vital to the nation’s industrial competitiveness. The advanced manufacturing process offers substantial improvements over current 3-nanometer technology, delivering either 15 percent greater processing speed or 30 percent reduced power consumption.

The application of the National Security Law signals Taiwan’s determination to protect its strategic technological assets. The prosecution has established that theft of critical semiconductor technology now constitutes a national security threat, reflecting the growing geopolitical significance of chip manufacturing capabilities.