Taiwan's Titans: Unmasking the Trade Secret Scandal in the Chip Industry

Taiwanese prosecutors have filed additional charges against Japan's Tokyo Electron and three individuals over alleged theft of trade secrets from TSMC. The case involves two former TSMC employees and one former Tokyo Electron worker, with significant prison terms and fines sought. Investigations reveal breaches of the National Security Act.

In a significant legal escalation, Taiwanese prosecutors on Monday announced further charges against the Taiwanese subsidiary of Japan's Tokyo Electron, accusing it of stealing trade secrets from semiconductor giant TSMC. The defendants include two former employees of TSMC, both surnamed Chen, and a past employee of Tokyo Electron Taiwan, surnamed Lu.

Authorities are pursuing considerable prison sentences for the trio: seven years for the first Chen, eight years and eight months for the second Chen, and one year for Lu. Additionally, prosecutors aim to impose a supplemental fine of T$25 million on Tokyo Electron's Taiwan entity, complementing a previously sought T$120 million penalty.

TSMC has confirmed the charges are based on findings from elongated investigations tied to legal actions they initiated in August 2025, yet refrained from further comments, citing ongoing judicial proceedings. Tokyo Electron and the implicated employees have not responded to requests for comment. This case highlights violations of Taiwan's National Security Act and Trade Secrets Act, as part of stricter enforcement against intellectual property theft.

(With inputs from agencies.)