NEWS BRIEF
Taiwanese prosecutors filed additional indictments against Tokyo Electron’s Taiwan unit and three defendants in a trade secrets theft case involving TSMC, seeking prison terms ranging from one to eight years and eight months. The new charges include two former TSMC employees and a former Tokyo Electron Taiwan employee, with prosecutors seeking an additional T$25 million fine on top of an initial T$120 million fine request, after discovering TSMC trade secrets still stored in the unit’s cloud storage.
WHAT HAPPENED
- Prosecutors indicted Tokyo Electron’s Taiwan unit and three defendants including two former TSMC employees and one former Tokyo Electron employee.
- Prison terms sought include seven years for the first Chen, eight years and eight months for the second Chen, and one year for Lu.
- Additional fine of T$25 million requested for Tokyo Electron’s Taiwan unit on top of initial T$120 million fine sought in December.
- Prosecutors discovered TSMC trade secrets still contained in Tokyo Electron Taiwan unit’s cloud storage during extended investigations.
WHY IT MATTERS
- The case involves alleged theft of core trade secrets from TSMC, the world’s leading contract chipmaker and critical supplier to global technology companies.
- Tokyo Electron is a major semiconductor equipment supplier, making the trade secrets case significant for the entire chip manufacturing ecosystem.
- The charges include violations of Taiwan’s National Security Act, elevating the case beyond typical corporate espionage to national security concerns.
- TSMC’s technological advantages and manufacturing processes are critical intellectual property worth billions and central to its market dominance.
IMPLICATIONS
- The case could strain business relationships between Japanese equipment suppliers and Taiwanese chipmakers in the critical semiconductor supply chain.
- TSMC may implement stricter security protocols and employee monitoring to prevent future trade secret theft by partners and suppliers.
- Tokyo Electron faces reputational damage and potential business disruptions despite the parent company maintaining it hasn’t been directly indicted.
- The prosecution signals Taiwan’s willingness to aggressively pursue trade secret theft cases involving its crown jewel technology companies regardless of foreign partners.
This briefing is based on information from Reuters.
