Taiwan Court Hands Prison Terms In Landmark TSMC Trade Secrets Case

TAIPEI, April 27 (Bernama-dpa) -- A Taiwanese court on Monday sentenced four former employees of Taiwan Semiconductor Manufacturing Company (TSMC), the world's largest maker of advanced chips, to prison terms of up to 10 years for theft and unauthorised disclosure of trade secrets, reported German Press Agency (dpa).

The Intellectual Property Court found the defendants guilty of violating the National Security Act, the Trade Secrets Act and computer misuse laws.

The lead defendant, Chen Li-ming, was sentenced to 10 years in prison, after prosecutors had sought a 14-year term. Three other defendants received sentences of six, three and two years, respectively. TSMC declined to comment on the verdict.

The case underscores Taiwan’s strategic importance in the global semiconductor industry, particularly as a critical supplier in the artificial intelligence supply chain for companies such as Nvidia and Apple.

Prosecutors said Chen, a former TSMC engineer who later joined Japan's Tokyo Electron, conspired with former colleagues still working at TSMC. Beginning in mid-2023, the group copied classified materials, including data related to next-generation chip manufacturing technology.

In the same ruling on Monday, a defendant linked to Tokyo Electron was sentenced to 10 months in prison and ordered to pay a fine of 1 million Taiwan dollars (US$31,800) to the state treasury.

Tokyo Electron was separately fined 150 million Taiwan dollars in total. Of this amount, 100 million Taiwan dollars is to be paid to TSMC, and 50 million Taiwan dollars is to be paid to the public treasury.

Presiding judge Chang Ming-huang told a press conference that the lighter sentence was primarily due to Chen’s full confession and his cooperation in identifying accomplices.

The court also took into account that Tokyo Electron had reached a settlement with TSMC, and that TSMC had expressed willingness to forgive the damages.

According to the court, this is Taiwan’s first case under the National Security Act involving trade secrets classified as national core critical technologies. All defendants may still appeal.

-- BERNAMA-dpa