Why Taiwan government has arrested three employees of the world's biggest chipmaker

Time of India

2 days ago

Taiwan
government have detained three current and former employees of
Taiwan Semiconductor Manufacturing Company
(TSMC) for allegedly stealing trade secrets related to the world's most advanced chip technology.
TSMC
fired several employees after discovering the breach through routine internal monitoring, then initiated legal proceedings that led to the arrests. The case marks the first major prosecution under Taiwan's amended National Security Act, with suspects facing up to 12 years in prison and fines exceeding $3 million.
The company, which produces 90% of the world's most advanced semiconductors for companies like
Apple
and Nvidia, detected unauthorized access to sensitive information about its cutting-edge
2-nanometer chip technology
, expected to enter mass production later this year.
TSMC's 2nm secrets at center of alleged theft
The case involves proprietary information about TSMC's 2-nanometer manufacturing process, currently the most sophisticated chip technology globally. Taiwan's High Prosecutors Office confirmed that three suspects were detained on "serious suspicions of violating national security laws," while three others were released on bail.
Prosecutors revealed the investigation began when TSMC detected unusual file access patterns by current employees. Internal investigations uncovered that former employees had allegedly colluded with current staff to obtain "national core technology trade secrets." The breach occurred at TSMC's Hsinchu facility, where the company produces its most advanced chips.
Tough penalties under Taiwan's new security laws
Taiwan amended its National Security Act in 2022 specifically to protect critical technologies from foreign adversaries, particularly targeting semiconductor innovations more advanced than 14-nanometer processes. The legislation addresses growing concerns about Chinese companies obtaining chip manufacturing expertise by recruiting Taiwanese engineers.
Under the enhanced law, violations involving national core technologies carry severe penalties: imprisonment up to 12 years and fines reaching NT$100 million ($3.3 million). The comprehensive framework protects defense, aerospace, agricultural, semiconductor, and information security technologies deemed vital to Taiwan's national interests.
TSMC emphasized its "zero-tolerance policy toward any actions that compromise the protection of trade secrets," stating it will pursue violations "to the fullest extent of the law." The company has previously fought extended legal battles against competitors who obtained its technology through former employees, including cases involving Samsung and China's Semiconductor Manufacturing International Corporation.
The investigation continues as prosecutors work to determine the suspects' motives and whether any sensitive information was actually transmitted to competitors or foreign entities.