Three individuals, including two former engineers from Taiwan Semiconductor Manufacturing Company, have been arrested in Taiwan for allegedly leaking proprietary chipmaking technology. The arrests mark the first major enforcement under Taiwan’s revised national security law aimed at protecting critical technologies, particularly in the semiconductor industry.
TSMC, the world’s leading chipmaker, uncovered the suspected breach through routine internal monitoring and reported it to prosecutors. One of the suspects was still employed by TSMC at the time of detection but was later dismissed. The case underscores the intense competition and growing geopolitical sensitivity surrounding advanced semiconductor manufacturing, an industry in which TSMC plays a dominant role by producing over 90 percent of the world’s most advanced chips.
As per Financial Times, Taiwan’s High Prosecutors Office stated that investigators carried out home and workplace searches between July 25 and July 28. Three suspects were arrested on strong suspicion of violating the country’s national security law, which was amended in recent years to include the protection of “national core technologies” such as chip manufacturing processes under 14 nanometres.
Authorities also searched the Taiwan offices of Tokyo Electron, a Japanese chip equipment manufacturer, though prosecutors have not disclosed the reason for this action. TSMC and Tokyo Electron are among the key players in the global semiconductor supply chain, but it remains unclear if any foreign entity was directly involved in this case.
TSMC did not confirm whether the leaked information had reached a competitor, citing the ongoing investigation. However, the company reaffirmed its zero-tolerance policy towards trade secret violations and pledged to pursue any breach to the fullest extent of the law. The company has previously engaged in legal battles with rivals, including Samsung and China’s Semiconductor Manufacturing International Corporation, over similar incidents involving ex-employees.
In a statement, TSMC emphasized that its robust internal systems allowed it to identify the threat early and that it would continue to strengthen its monitoring and compliance measures. The company also stated its commitment to working with regulatory bodies to safeguard its technological edge and operational integrity.
Although Apple is not mentioned in the investigation, it remains one of TSMC’s most important clients. The company relies exclusively on TSMC to manufacture its custom silicon, including the A-series and M-series chips. Any compromise of TSMC’s intellectual property or manufacturing stability could potentially impact Apple’s supply chain and future chip development. Apple is expected to be the first customer to adopt TSMC’s upcoming 2nm process node, which makes safeguarding the company’s advanced chip designs even more critical.
The case highlights the rising importance of intellectual property security in Taiwan’s tech sector, especially as geopolitical tensions and global demand for advanced semiconductors continue to grow.
