3 ex-employees of Taiwan chipmaker TSMC arrested for allegedly obtaining trade secrets

Three former employees of Taiwan Semiconductor Manufacturing Co (TSMC), the world's largest contract maker of chips, were arrested for allegedly compromising classified information used in making 2-nanometer chips.

According to Taipei Times, the Taiwan High Prosecutors Office are currently detaining a former TSMC engineer surnamed Chen, and two recently fired TSMC engineers following an investigation that was launched on Jul. 25.

The two suspects who were recently fired were employees at TSMC during the time of the alleged breach, Nikkei Asia reported.

TSMC said on Aug. 4 that it has taken "strict disciplinary actions" against those involved and have "initiated legal proceedings".

Employees illegally obtained information from the company

According to a statement made by the Taiwan High Prosecutors Office on Aug. 5, the case came to light after TSMC "detected unusual access patterns in the files of a current employee", Nikkei Asia reported.

An internal investigation was launched in response and TSMC "discovered that its national core technology trade secrets had been allegedly illicitly obtained by a former employee in collusion with current employees".

Taiwan High Prosecutors Office affirmed that a thorough investigation into the motives "behind the suspects' illegal acquisition of TSMC's national core technology trade secrets" will be done.

They also added that they will be determining whether the trade secrets have been further leaked to other parties.

The Taiwan High Prosecutors Office stated that the case falls under the scope of the Taiwan National Security Act (NSA) and is being investigated by the office's Intellectual Property Branch.

The NSA was previously amended in 2022 to better protect trade secrets related to national core key technologies, and to ensure national security and an industrial competitive advantage.

According to Nikkei Asia, this case is the first significant one involving chip technology to be investigated under the NSA.

TSMC's 2-nanometer chip

According to Nikkei Asia, the 2-nanometre technology is currently the most advanced chip manufacturing process globally and production of the chips is scheduled to take place before 2026.

"Difficult to duplicate technologies from TSMC"

TSMC Chairman and Chief Executive Officer (CEO) C.C. Wei emphasised that their technologies are not easy to duplicate due to the complex expertise and years of hands-on experience required, Nikkei Asia reported.

He added that the company enforces a strict zero-tolerance policy against any actions that threaten its business interests or trade secrets.

TSMC also stated its commitment to protecting its core strengths, supporting its employees and making improvements to internal systems, as well as cooperating with regulators to maintain its competitive edge.

Top photos via Canva, Taiwan Semiconductor Manufacturing Company/Facebook