Fallout from Trade Secret Theft in Taiwan

October 6, 2025

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As reported by Reuters, three former employees of Taiwan Semiconductor Manufacturing Company ("TSMC") were charged with violating security law and other offences in Taiwan. The prosecutors have reportedly indicted these three individuals for illegally obtaining trade secrets related to sensitive chip technology from TSMC.

One of the three individuals reportedly worked for the Taiwanese subsidiary of Tokyo Electron, a Japanese chipmaking equipment manufacturer. Prosecutors allege that he asked the two other individuals to provide information regarding equipment for manufacturing cutting-edge 2-nanometer semiconductors, which are not yet commercially available. These two individuals reportedly suggested that the aim of obtaining the information was to make Tokyo Electron a supplier to TSMC.

The prosecutors reportedly suggested that analyses of the electronic records and other evidence provided a basis for the criminal allegations, which they described as a grave incident that poses a serious threat to the competitiveness of Taiwan's semiconductor industry. The High Prosecutors Office's Intellectual Property Branch, in a statement, reportedly asserted that "this case involves critical national core technologies vital to Taiwan's industrial lifeline, gravely threatening the international competitiveness of Taiwan's semiconductor sector." 

Prosecutors are reportedly seeking a term of 14 years of imprisonment for the former TSMC employee, who worked for the Taiwanese unit of Tokyo Electron, and 9 and 7 years, respectively, for the other two individuals.

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Authors: Serayah Jamadar, 2025/2026 Articling Student-At-Law, and Ayesha Khanna