Taiwan Fine and Jail Sentences Shake Up Semiconductor Industry

A Taiwan court fined Japan's Tokyo Electron local unit T$150 million and sentenced five individuals to jail in a case connected to TSMC's trade secrets. The court found violations of Taiwan's National Security Act with technology intended for use outside Taiwan. The trade secrets involve TSMC's advanced 2-nanometre process technology.

In a landmark ruling, a Taiwan court imposed a T$150 million fine on Japan's Tokyo Electron local unit and sentenced five individuals to jail for unlawfully obtaining trade secrets from TSMC. The sensitive information relates to TSMC's 2-nanometre technology, a cornerstone of the company's global leadership in chip manufacturing.

The court revealed that images of the stolen data were found in the cloud system of Tokyo Electron, spotlighting severe breaches of Taiwan's National Security Act. The prosecuted parties face jail terms ranging from 10 months to 10 years, while TSMC plans to enhance internal safeguards to protect its competitive edge.

Chen Li-ming and three other former TSMC employees were convicted, along with a former Tokyo Electron employee whose sentence was suspended. Despite the severe penalties, the convicted individuals may challenge the ruling via an appeal process, while Tokyo Electron distanced itself from any organisational wrongdoing.