A major alleged trade-secret theft case tied to TSMC’s cutting-edge 2nm process is now moving into the legal punishment phase, with Taiwan authorities pursuing serious prison time for engineers accused of stealing confidential semiconductor technology.
According to reports from local sources, both former and then-current TSMC engineers were implicated after an extensive investigation. Prosecutors say the suspects violated Taiwan’s National Security Act, and they are now seeking sentences of up to 14 years in prison—an indication of how aggressively Taiwan is treating advanced chip technology protection as a national-security priority.
The allegations center on the period from 2023 through the first half of last year. Prosecutors claim a former TSMC employee repeatedly approached engineers still working at TSMC and requested key technical details and trade secrets connected to TSMC’s advanced manufacturing—specifically involving the 2nm node and the etching process used in production. The goal, prosecutors say, was to give an equipment supplier a technical advantage by helping it refine etching tool performance to meet the requirements needed to qualify for mass-production supply in TSMC’s 2nm manufacturing lines.
Investigators reportedly uncovered methods that suggest the theft was deliberate and difficult to trace through normal channels. One of the red flags came from attempts to access internal databases improperly, triggering TSMC’s security systems. Authorities also allege that smartphones were used to photograph sensitive internal materials related to the N2 (2nm) process, allowing information to be captured outside official systems.
The main figure described in the case is said to be a former TSMC employee who later worked at Tokyo Electron (TEL). Investigators believe the stolen information was intended to help improve chipmaking equipment—particularly etching tools—so the company could strengthen its position when competing for TSMC orders. Because advanced process knowledge can influence equipment qualification, yields, and production readiness, information tied to 2nm has enormous value in the semiconductor supply chain.
Taiwan’s response has been swift and intense. With 2nm process development viewed as strategically important—not only commercially but also in a broader geopolitical sense—authorities treat sensitive semiconductor technology like critical infrastructure. That context helps explain why prosecutors are seeking heavy penalties and why the case has drawn wide attention across the industry.
The situation may not be isolated, either. Reports indicate there is also a separate ongoing investigation involving another former TSMC employee now working at Intel, who is similarly accused of transferring sensitive technology. If confirmed, it would further highlight how competitive pressures around next-generation chips are driving tighter enforcement and increased scrutiny on employee movement, supplier relationships, and information security across the semiconductor sector.
