Three Detained in Taiwan For Alleged Theft of TSMC Chip Secrets

Three people have been arrested by authorities in Taiwan for allegedly stealing technology trade secrets from TSMC, the world’s leading chipmaker.

Prosecutors said on Tuesday that three current and former employees were detained late last month after an internal investigation by Taiwan Semiconductor Manufacturing Company found the trio illegally obtained information from the firm.

Taiwan High Prosecutors’ Office said in a statement that another two people had been released on bail, while a sixth person had also been released.

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The three who were detained – two current staff and one former employee – are suspected of violating Taiwan’s national security law, it added.

It did not disclose their identities apart from saying that the former staffer was surnamed Chen. Two of them are reportedly chip engineers.

‘Core technologies’

Earlier on Tuesday, TSMC said it had launched legal proceedings and taken disciplinary action against employees involved in potential trade secret leaks after detecting unauthorised activities during routine monitoring.

It said its “comprehensive and robust monitoring mechanisms” enabled early identification of the issue, leading to internal investigations and measures against the personnel involved.

TSMC said the legal case, which is now under judicial review, prevented it from providing further details.

This is believed to be the first case of a ‘potential trade secrets leak’ since lawmakers added provisions to the national security law to try to protect “national core technologies” three years ago, after cases in which Chinese companies obtained information about chipmaking via engineers poached from Taiwan, the FT reported.

It said the intellectual property barred from being passed to “foreign hostile forces” and other rivals includes details on how to make chips smaller than 14 nanometres.

TSMC, which makes most of the world’s most advanced computer chips, is preparing to start mass production of 2nm chips later this year.

The latest allegations show the extraordinary rivalry at the cutting edge of global competition in the multi-billion-dollar sector.

‘2nm chip tech sought’

Nikkei Asia earlier reported that the breach involved several former employees suspected of attempting to obtain critical proprietary information on TSMC’s 2-nanometre chip technology.

There were no immediate details on the suspected motives or whether any information had been passed on, and investigations are ongoing to determine the scope of the leak and whether any others were involved, the Nikkei report said.

Taiwanese media outlet United Daily News said prosecutors and investigators had also searched the offices of Tokyo Electron, the Japanese technology tool maker, without citing where they had obtained the information. Tokyo Electron and the prosecutors’ office declined to comment.

TSMC’s 2-nanometre chip technology is the most advanced technology in the computer chip industry in terms of both density and energy efficiency, according to the company’s website.

The contract manufacturer, which counts AI industry darling Nvidia, iPhone maker Apple, and Qualcomm among its customers, highlighted its zero-tolerance policy for trade secret violations, and said it would pursue offenders to the full extent of the law.