TSMC pursues legal action against employees caught in trade secret thefts

Taiwan Semiconductor Manufacturing Co. (TSMC) announced the detection and eventual discovery of what seems to be a leak of proprietary data about its 2nm chips. The company disclosed that it had started legal proceedings against the affected employees, who were also fired.   

The top chipmaker revealed that the leaked data included sensitive information about the 2nm chip’s development and production. TSMC said the discovery was made during “routine monitoring,” and the leaked information could threaten national security.

The company is set to begin mass production of these 2nm chips later this year. However, the impact of this latest development on this timeline is still unclear. 

TSMC also said it is unclear what the allegedly involved employees intended to do with the data obtained. It emphasized that investigations are ongoing into the data’s possible destination.

The investigations also include examining the scope of the leak and whether other parties are involved. However, TSMC mentioned that the case is under “judicial review,” although the High Prosecutors’ Office of Taiwan had no comments. It promised to share details as events unfold.

Wei claims copying TSMC’s tech is impossible

C.C. Wei, TSMC’s Chairman and CEO, previously said duplicating the company’s technologies was impossible. He pointed out that the complicated process requires both development and production knowledge. Only TSMC, Rapidus, Samsung, and Intel are actively developing 2nm chip technology. The rest have quit the race.

TSMC said it maintains a “zero-tolerance policy” towards actions compromising trade secrets or their protection. The company is also against actions that could harm its interests. Such violations are strictly and decisively dealt with. TSMC promised to pursue the matter “to the full extent of the law.” 

“We will continue to strengthen our internal management and monitoring systems and will work closely with relevant regulatory authorities as necessary to protect our competitive advantage and operational stability.”

–TSMC   

The company added that it remains committed to safeguarding its employees’ shared interests and its “core competitiveness.” TSMC said it has a “comprehensive and robust monitoring mechanism” that allows it to identify issues early and swiftly take steps to mitigate the risks. 

Taiwan protects ‘national core critical technologies’ 

The Supreme Prosecutors’ Office’s Intellectual Property Division said on August 5 that a former TSMC employee surnamed Chen was suspected of illegally obtaining trade secrets. A current employee surnamed Wu was also involved in the scheme, but he has been dismissed. Investigations launched in July allowed the court to “detain and deny” contact with all suspects for violating the National Security Act. 

Taiwan’s 2022 National Security Act protects trade secrets linked to “national core critical technologies” from unauthorized access, use, reproduction, or disclosure. Breaching the Act can result in criminal charges.

Prosecutors from the Intellectual Property Division (IPD) asked the Ministry of Justice Investigation Bureau’s investigation station in Hsinchu City to summon and arrest all involved parties. They also directed the Northern Mobile Workstation and the Information Security Workstation to search the workplaces and residences of all suspects between July 25 and July 28. 

The Intellectual Property Division stated that it is illegal to know or possess trade secrets of Taiwan’s core technologies. It added that the current “criminal suspicion” is “serious” because it is the first in the country. The IPD’s office disclosed that Chen and his alleged criminal partners would be thoroughly investigated and prosecuted “in accordance with the law.”   

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