Taiwan Charges Tokyo Electron’s Local Unit in TSMC Trade Secrets Case
Taipei — Taiwan prosecutors have formally charged the Taiwan unit of Tokyo Electron with violations of the National Security Act and the Trade Secrets Act, marking a significant development in a closely watched case involving the alleged theft of core technology belonging to Taiwan Semiconductor Manufacturing Company.
The indictment follows months of investigation after a former employee of Tokyo Electron’s Taiwan unit was charged earlier this year for allegedly stealing sensitive information from TSMC, one of the world’s most advanced chip manufacturers. Authorities said this case represents the first corporate indictment under Taiwan’s National Security Act concerning the protection of national core critical technologies.
Prosecutors stated that the company could face penalties of up to T$120 million if convicted, underscoring the seriousness with which Taiwan treats industrial espionage and the safeguarding of semiconductor innovation. The semiconductor sector is central to Taiwan’s national security framework, given its leading role in global chip supply chains.
Investigators said they reviewed interviews with the former employee, identified only by his surname Chen, as well as testimonies from multiple Tokyo Electron staff members. After examining internal documents and written responses submitted by the company, authorities concluded that Tokyo Electron’s Taiwan unit had a legal obligation to supervise Chen and ensure strict measures were in place to prevent misconduct involving sensitive technologies.
According to the prosecution, while the company maintained general internal rules and issued standard cautionary notices to employees, it did not provide evidence of detailed oversight procedures or targeted compliance mechanisms designed to prevent the misappropriation of critical trade secrets. This lack of concrete controls contributed to the decision to hold the corporate entity legally accountable for failing to prevent the alleged offence.
Tokyo Electron and its Taiwan branch have not yet issued public comments on the latest indictment. The company previously said, following the initial charges against the ex-employee, that it had not confirmed any organisational involvement in the case and would cooperate with investigative authorities.
The broader investigation has drawn significant attention within Taiwan’s semiconductor sector due to its connection with TSMC’s highly advanced 2-nanometer process technology. In August, prosecutors charged three individuals, including the former TSMC employee Chen, accusing them of attempting to obtain confidential information to help Tokyo Electron compete more effectively for supplier contracts tied to TSMC’s next-generation chipmaking processes.
Authorities said the ex-employee, after joining Tokyo Electron, reached out to former colleagues at TSMC to request detailed technical data and trade secrets related to cutting-edge manufacturing steps. These details, prosecutors noted, form part of Taiwan’s category of national core critical technologies, which are protected under stringent laws aimed at preventing foreign or commercial exploitation.
Taiwan has recently intensified efforts to protect its semiconductor intellectual property as global competition in the microchip industry heightens. With demand for more efficient and powerful processors growing across sectors such as artificial intelligence, defence, and consumer electronics, the safeguarding of advanced manufacturing knowledge has become a strategic priority for the government.
The case also reflects the growing involvement of prosecutors in corporate governance issues linked to technology security. By holding a corporation responsible for insufficient internal controls, authorities are signaling an expanded interpretation of compliance obligations for companies operating within sensitive technology sectors.
Legal analysts say this prosecution could prompt multinational firms in Taiwan to reassess their internal monitoring frameworks, particularly those that work closely with semiconductor leaders, to avoid similar liabilities. Industry experts note that firms interacting with TSMC or other strategic technology providers may face tightened oversight in the future.
The investigation remains ongoing as prosecutors continue examining whether additional individuals or entities may have played a role in the alleged attempt to acquire restricted information. Taiwan’s judiciary has emphasised that the protection of national technology assets will remain a priority as the island strengthens its global leadership in semiconductor innovation.
