Former TSMC Staff Arrested On Alleged Theft Of Chip Trade Secrets

Illustration of the TSMC office in Taiwan (photo: x @kenmoriyatsu ·)

Three people, including two former Taiwanese Semiconductor Manufacturing Company (TSMC) employees, were arrested after being accused of stealing exclusive technology from the Apple chipmaker partner. The case was confirmed by Taiwanese prosecutors.

Industrial Espionage is a high-risk crime with great potential profits. In this case, TSMC detected an alleged "tradual secret leak" through its internal monitoring system, which was later reported to prosecutors.

The suspects arrested consisted of a former TSMC engineer, and another person who was still an employee before being fired after his activities were revealed. All three were accused of "violating national security laws," although prosecutors did not provide further details.

The investigation also led to the search of facilities belonging to the Japanese chip equipment maker, Tokyo Electronic. Several of the suspect's residences and workplaces were also searched by the police.

This arrest is not the only significant measure in this investigation. Previously, several TSMC employees were also reportedly fired for seeking information related to the company's 2-nanometer production process.

Apple, which is TSMC's main client for series A and M chips, is expected to be one of the first parties to use a 2-nanometer chip which is planned to start production by the end of 2025.

This investigation is the first to be carried out under Taiwan's national security law which was amended three years ago to protect key technologies, including TSMC which is considered a "eye" in the country's tech industry.

TSMC produces more than 90% of the world's advanced chips, therefore the Taiwanese government is taking serious steps to protect the company. This change in law comes after a case in which Chinese companies recruited engineers from Taiwanese companies to increase their own chip production.

In fact, in May 2024, it was revealed that TSMC had the ability to damage expensive chip production machines remotely, to prevent it from falling into the hands of other parties in the event of an invasion.