TSMC Cracks Down: Employees Face Legal Heat in High-Stakes Trade Secret Theft Scandal

TSMC draws a hard line—lawsuits fly as chip secrets slip into the wrong hands.

Subheader: Silicon Shield Breached

The world's top chipmaker isn't playing nice. When proprietary tech walked out the door, TSMC's legal team walked into court. No settlements, no whispers—just scorched-earth litigation.

Subheader: Espionage Goes Mainstream

Corporate spies used to lurk in shadows. Now they clock in at 9 AM. TSMC's case proves even blue-chip employees can't resist the siren song of stolen IP—especially when fab tech rivals gold bullion.

Subheader: The Cost of Doing Business (Badly)

One finance exec quipped: 'Why short TSMC stock when their employees do it for free?' The real damage? Calculated in lost R&D cycles, not just courtroom fines.

Closer: This isn't just about patents—it's about sending a message. And TSMC's memo reads: 'Get caught, get crucified.'

Wei claims copying TSMC’s tech is impossible

C.C. Wei, TSMC’s Chairman and CEO, previously said duplicating the company’s technologies was impossible. He pointed out that the complicated process requires both development and production knowledge. Only TSMC, Rapidus, Samsung, and Intel are actively developing 2nm chip technology. The rest have quit the race.

TSMC said it maintains a “zero-tolerance policy” towards actions compromising trade secrets or their protection. The company is also against actions that could harm its interests. Such violations are strictly and decisively dealt with. TSMC promised to pursue the matter “to the full extent of the law.” 

“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.”

–TSMC   

The company added that it remains committed to safeguarding its employees’ shared interests and its “core competitiveness.” TSMC said it has a “comprehensive and robust monitoring mechanism” that allows it to identify issues early and swiftly take steps to mitigate the risks. 

Taiwan protects ‘national core critical technologies’ 

The Supreme Prosecutors’ Office’s Intellectual Property Division said on August 5 that a former TSMC employee surnamed Chen was suspected of illegally obtaining trade secrets. A current employee surnamed Wu was also involved in the scheme, but he has been dismissed. Investigations launched in July allowed the court to “detain and deny” contact with all suspects for violating the National Security Act. 

Taiwan’s 2022 National Security Act protects trade secrets linked to “national Core critical technologies” from unauthorized access, use, reproduction, or disclosure. Breaching the Act can result in criminal charges.

Prosecutors from the Intellectual Property Division (IPD) asked the Ministry of Justice Investigation Bureau’s investigation station in Hsinchu City to summon and arrest all involved parties. They also directed the Northern Mobile Workstation and the Information Security Workstation to search the workplaces and residences of all suspects between July 25 and July 28. 

The Intellectual Property Division stated that it is illegal to know or possess trade secrets of Taiwan’s core technologies. It added that the current “criminal suspicion” is “serious” because it is the first in the country. The IPD’s office disclosed that Chen and his alleged criminal partners WOULD be thoroughly investigated and prosecuted “in accordance with the law.”   

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