What just happened? TSMC says has taken strict disciplinary action and launched legal proceedings against a number of employees over potential trade secret leaks. The world’s largest chipmaker said that the discovery was made after it detected unauthorized activities on its network during routine monitoring.
TSMC said in a statement that its comprehensive and robust monitoring mechanisms allowed it to identify the potential crime early. It started an internal investigation, which led to disciplinary action against the employees involved.
The semiconductor manufacturer said it has a zero-tolerance policy toward any actions that compromise the protection of trade secrets or harm the company’s interests. It added that such violations are dealt with strictly and pursued to the fullest extent of the law.
“We remain committed to safeguarding our core competitiveness and the shared interests of all our employees. To ensure this, 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 said it was unable to provide details about the incident as it is under judicial review. We don’t officially know what trade secrets were involved, if they were transported or transmitted to third parties, and how many employees have faced disciplinary action.
However, according to Nikkei Asia, which cites multiple sources familiar with the matter, the now-former employees are suspected of trying to obtain critical proprietary information on 2-nanometer chip development and production. Bloomberg writes that the number of people arrested could be as high as six.
Under Taiwan’s new National Security Act, the perpitrators could face 12 years in jail and a fine of up to NT$100 million ($3.3 million).
In June, it was reported that N2 (2nm) semiconductors will cost $30,000 per wafer, making them around 66% more expensive than the company’s 3nm chips. TSMC says the prices are justified as the cost of building 2nm fabrication plants can reach up to $725 million.
Companies have long pursued employees accused of trade secret theft into the courts. Google sued a former engineer for leaking Pixel chip secrets in 2024. Tesla, meanwhile, recently claimed an ex-employee downloaded data for its Optimus robot design then formed a rival startup. There’s also Apple’s lawsuit against Rivos and several former Cupertino employees, which alleges misappropriation of trade secrets related to SoC designs.
A more recent high-profile case was Apple suing leaker Jon Prosser. It claims that he conspired to break into an employee’s development iPhone to steal trade secrets relating to the upcoming iOS 26 update.