Taiwan, Taiwan
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Taiwanese authorities have detained three current and former employees of Taiwan Semiconductor Manufacturer (TSMC), the world’s largest chip manufacturer, and allegedly stole occupational secrets, prosecutors said Tuesday.
Law enforcement officials questioned several suspects and witnesses later last month. The intellectual property division of Taiwan’s High Prosecutor’s Office searched their homes on Tuesday and detained three people over “serious suspicions of violating national security laws.”
Using leading clients, including Apple and Nvidia, TSMC produces more than 90% of the world’s advanced semiconductor chips that power everything from smartphones and artificial intelligence (AI) applications to weapons.
Taiwan’s leading exporters have raised suspicions that its “core technology” could have been illegally accessed by former and current staff of authorities after an internal investigation.
The prosecutor’s office said in the first cases of this kind, since Taiwan tightened its national security law to protect key technologies in 2022, it would investigate the motives behind the theft of trade secrets and whether TSMC proprietary information was leaked to other parties.
Nikkei Asia first reported Tuesday that TSMC fired staff suspected of illegally obtaining business secrets related to the manufacturing technology of the company’s 2-nanometer chip, the most advanced processor in the semiconductor industry, which is set to enter mass production this year.
Due to the development costs and the level of knowledge required, it is difficult to create ultra-advanced semiconductor chips. That is, much of the production is concentrated on just a handful of suppliers, such as TSMC, Intel, Samsung, and Rapidus.
The TSMC said it discovered potential trade secret leaks after unauthorized activity was detected during regular monitoring.
“TSMC has taken strict disciplinary action against those involved and has commenced legal proceedings,” the company said in a statement. “Such violations are strictly treated and pursued to the fullest extent of the law.”
Local Taiwanese media reported that a former TSMC employee is currently working for top chip manufacturing equipment supplier Tokyo Electronics Co., Ltd., and that the Taiwan office of a Japanese company has been attacked by investigators.
Tokyo Electronics’ Taiwan office told CNN there was no comment.
A violation of TSMC’s major trade secrets could have national security implications for Taiwan if proven true. This is because it could narrow down the technical leads the company has more than its advanced chip manufacturing competitors.
TSMC’s technical capabilities promote the general belief in Taiwan that the island’s global dependence on semiconductors will act as a “silicon shield.” This is a leverage of deterrence and global diplomacy against potential Chinese aggression.
The strengthened law, which caused penalties for theft of core technology and banned its use in foreign countries, came after years of incidents in a Chinese company that acquired know-how in chip manufacturing by poaching Taiwanese engineers.
