Tokyo Electron Faces Scrutiny Amid TSMC Trade Secrets Leak

A Taiwanese investigation into the theft of chip technology at Taiwan Semiconductor Manufacturing Co. has led to the arrest of six individuals, including a former employee of Tokyo Electron Ltd. The Japanese company has fired the employee and is cooperating with the investigation, but its shares have fallen 2.5% on the news. The case raises questions about Tokyo Electron's involvement and potential motivations for stealing trade secrets.

Taiwanese authorities have detained six individuals, including a former employee of Tokyo Electron Ltd., in connection with the alleged theft of trade secrets from Taiwan Semiconductor Manufacturing Co. (TSMC). The investigation, which has raised significant concerns in the global semiconductor industry, has led to the dismissal of the Tokyo Electron employee by the Japanese company.

The case began when TSMC discovered unauthorized activities during routine monitoring, prompting an internal investigation that raised suspicions about its "core technologies" being illegally accessed by former and current staffers. The Taiwanese High Prosecutors Office has since detained three current and former TSMC employees and questioned several suspects and witnesses [2].

Tokyo Electron, a key supplier of manufacturing tools to TSMC, confirmed that it had dismissed an employee of its Taiwan subsidiary involved in the case. The company stated that it is cooperating with authorities and has not confirmed any evidence of confidential information being shared with third parties [2].

The incident highlights the escalating risks of intellectual property theft in the semiconductor industry, where technological edges can translate to billions in revenue. TSMC, which commands over half the global foundry market, has long been a target for espionage due to its role in producing chips for major tech companies like Apple Inc. and Nvidia Corp. [1].

The theft of TSMC's 2-nanometer chip technology, which is set to debut in 2025, could have significant implications for the company's lead in advanced nodes and national security for Taiwan. The tightened legislation in Taiwan, which raised penalties for theft of core technologies and banned their use in foreign countries, has been in response to years of incidents involving Chinese companies obtaining chip manufacturing know-how by poaching Taiwanese engineers [2].

The fallout from the case has already been felt in the markets, with Tokyo Electron's shares falling by 2.5% on the news. The company's decision to fire the employee and cooperate with the investigation marks its first public acknowledgment of the affair, following days of speculation in Taiwanese media.

Looking ahead, the case may influence policy and prompt enhanced cybersecurity measures and international collaboration to protect semiconductor intellectual property. TSMC has pledged to bolster its defenses, while Taiwanese officials treat the matter as a national security issue [1].

References:
[1] https://www.webpronews.com/tokyo-electron-fires-employee-in-tsmc-2nm-chip-theft-probe/
[2] https://www.cnn.com/2025/08/06/asia/taiwan-tsmc-staff-detained-trade-secrets-intl-hnk