High-Stakes Legal Battle Over Chip Technology in Taiwan

Taiwan's court fined Tokyo Electron's local unit T$150 million and imposed jail sentences on five individuals for illegally obtaining TSMC's chip technology. This case, involving the National Security Act, was one of Taiwan's most significant breaches of core technology laws.

In a landmark decision, a Taiwanese court has fined the local unit of Japan's Tokyo Electron T$150 million ($5 million) and handed jail sentences to five individuals implicated in the unlawful acquisition of sensitive chip technology from TSMC, one of Taiwan's most crucial industries. This legal action marks one of the island's most prominent cases involving breaches under the National Security Act.

The defendants, including former TSMC and Tokyo Electron employee Chen Li-ming, faced charges for their roles in the illicit scheme aimed at exploiting confidential trade secrets to secure more equipment orders for Tokyo Electron. Sentences ranged from two to ten years, reflecting the severity of the allegations and Taiwan's stringent enforcement of its technology protection laws.

The developments also surfaced amid broader concerns over intellectual property rights and national security in the tech sector, with neither TSMC nor Tokyo Electron giving an immediate response. Despite the controversy, the case did not affect Tokyo Electron's financial standing, as the company pledged to bolster compliance and auditing practices. TSMC shares closed up 3.7%, underscoring investor confidence despite the legal turmoil.