tsmc secrets stolen? taiwan prosecutors indict three in alleged leak to japanese firm
taipei, Thursday, 28 August 2025.
Three individuals face charges for allegedly stealing trade secrets from TSMC, the world’s leading chipmaker. Taiwanese prosecutors claim the trio conspired to benefit Tokyo Electron, a Japanese corporation, by providing confidential information related to TSMC’s advanced 2-nanometer process technology. A former TSMC employee is among those indicted. The incident underscores the intense competition and the critical need to protect intellectual property within the semiconductor industry. If found guilty, the accused could face a combined prison term of 14 years.
allegations and legal proceedings
Prosecutors allege that Chen, a former TSMC engineer who later joined Tokyo Electron, repeatedly requested his ex-colleagues to provide access to TSMC’s core technology trade secrets [5]. Chen sought to photograph and replicate these secrets [5]. The goal was to aid Tokyo Electron in improving its etching machine performance and secure its position as a supplier for TSMC’s 2-nanometer process [5]. The Taiwan High Prosecutors Office for Intellectual Property Crimes has filed charges against the three individuals based on violations of the Trade Secrets Act and the National Security Act [5].
potential impact on tsmc stock
The indictment introduces several factors that could influence TSMC’s stock (TSM:NYSE). The primary concern revolves around potential disruptions to TSMC’s manufacturing capacity and competitive edge [1]. Successful theft of trade secrets related to the 2-nanometer process, considered the most advanced in the industry, could undermine TSMC’s technological leadership [1]. This could lead to a reassessment of TSMC’s valuation by investors, particularly if the stolen information significantly benefits competitors like Tokyo Electron [1][5].
geopolitical considerations
Geopolitical risks further complicate the stock implications. Taiwan’s position in the semiconductor industry makes TSMC a strategic asset [GPT]. The involvement of a Japanese company, Tokyo Electron, introduces international dimensions to the case [1]. The legal proceedings and any potential impact on TSMC’s technology could be viewed through the lens of international trade and technology competition [GPT]. Heightened geopolitical tensions could amplify investor caution toward TSMC [GPT].
tsmc’s response
TSMC has responded to the incident with a firm stance, emphasizing its zero-tolerance policy towards actions compromising trade secrets and company interests [1]. The company stated its commitment to safeguarding its core competitiveness through strengthened internal management, monitoring systems, and collaboration with regulatory authorities [1]. This proactive approach aims to reassure investors about TSMC’s dedication to protecting its intellectual property and maintaining operational stability [1].