tsmc faces 2nm tech leak, national security invoked
Taipei, Wednesday, 13 August 2025.
Taiwanese authorities are investigating a potential technology leak at TSMC. The leak concerns the company’s highly anticipated 2nm chip process. This has triggered Taiwan’s National Security Act. The incident raises concerns about TSMC’s production timeline and competitive standing. Stolen data may have been passed to Rapidus, a Japanese startup aiming to produce 2nm chips by 2027. Nine engineers are under investigation, and potential penalties include a 12-year prison sentence and a $3 million USD fine.
national security act invoked
Taiwan’s revised National Security Act, amended in 2022, classifies integrated circuit manufacturing technology below 14nm as a “core national key technology” [1][2][5]. In 2024, the law was updated to include 10 additional confidential technologies, bringing the total to 32 [2]. These encompass fields such as defense, AI high-performance chips, semiconductor processes, and space [2]. This incident marks the first prosecution under the revised act, underscoring the severity of the alleged breach [1][2].
impact on tsmc’s competitive edge
The technology leak could impact TSMC’s competitive advantage [1]. Ray Wang, Director of Research at The Futurum Group, stated that TSMC’s 2nm technology outperforms Samsung and Intel in overall performance metrics [1][2][5]. Wang also noted that TSMC’s yield rate is significantly higher and more stable, although Samsung and Intel are working to close the gap [1][2][5]. The loss of proprietary information could potentially erode this lead, affecting TSMC’s market leadership and future revenue streams [alert! ‘stock prices are not directly mentioned in the source, so an inference is needed’] .
details of the investigation
The investigation has implicated at least nine engineers, including three from TSMC’s Fab 20 plant in Baoshan, Hsinchu, and six from R&D support departments [2][5]. Three employees were reportedly fired, while others were reassigned [5]. One of the suspects, Chen, an engineer at Tokyo Electron Taiwan, previously worked at TSMC [2]. The involvement of a former TSMC employee now working for a key equipment supplier raises concerns about potential vulnerabilities in intellectual property protection [5].
potential implications for production timeline
TSMC’s 2nm chips are expected to enter mass production in the second half of the year [1][2][5]. The leak and subsequent investigation could potentially disrupt this timeline [1]. Any delays in production could affect TSMC’s ability to meet customer demand and maintain its position in the advanced chip market [alert! ‘market position inference based on potential production delays’]. TSMC maintains a “zero tolerance” attitude towards any behavior that violates the protection of trade secrets and damages the company’s interests [5].