TSMC Fires Employees for Trade Secret Theft, Malaysia Leads Indonesia in Auto Sales

Taiwan Semiconductor Manufacturing Co. fired several employees for allegedly stealing company secrets, while Malaysia surpassed Indonesia in auto sales for the first time.

Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chipmaker, has dismissed several employees and launched an internal investigation into suspected leaks of trade secrets linked to its advanced 2-nanometre (nm) chip technology. The company confirmed to Nikkei Asia that it had uncovered "unauthorized activities during routine monitoring," which led to the discovery of potential breaches involving sensitive information [4].

The Taiwanese chip maker is investigating whether the information was transferred externally and whether additional parties were implicated. The case has now been referred for judicial review in Taiwan [4]. According to initial findings, the suspected violations relate to former employees attempting to access proprietary data concerning the development and production of the 2-nm process, a next-generation technology considered critical to the global semiconductor industry [4].

Separately, in a significant development in the automotive sector, Malaysia has surpassed Indonesia in auto sales for the first time. This shift is attributed to the increasing demand for electric vehicles (EVs) and the strategic investments made by major automakers in the region [1].

The 2-nm process is currently the most advanced chip manufacturing technology under development and is expected to enter mass production later this year. It is being pursued by only a handful of global players, including TSMC, Samsung Electronics, Intel, and Japan’s Rapidus [4].

The investigation into TSMC's suspected trade secret leak is the first of its kind since Taiwan tightened its national security law to protect its key technologies in 2022 [1]. This law raises penalties for theft of core technologies and bans their use in foreign countries, following years of incidents involving Chinese companies obtaining chip manufacturing knowhow by poaching Taiwanese engineers [1].

Meanwhile, Tokyo Electron Ltd., a Japanese chip-making machinery maker, confirmed that a former employee of its Taiwan subsidiary was involved in the case cited by the Intellectual Property Branch of the Taiwan High Prosecutors Office [3]. Tokyo Electron dismissed the employee and said its internal investigation found no evidence of confidential information being shared with third parties [3].

Investors and financial professionals should closely monitor the developments in these cases, as they could have significant implications for the global semiconductor industry and the geopolitical landscape [1].

References:
[1] https://www.cnn.com/2025/08/06/asia/taiwan-tsmc-staff-detained-trade-secrets-intl-hnk
[2] https://www.investing.com/news/company-news/taiwan-semiconductor-employees-detained-over-trade-secret-theft-93CH-4169949
[3] https://www.tradingview.com/news/reuters.com,2025:newsml_L1N3TZ04N:0-tokyo-electron-confirms-taiwan-unit-employee-s-involvement-in-intellectual-property-case/
[4] https://www.firstpost.com/world/taiwans-tsmc-fires-staff-probes-suspected-trade-secret-leak-of-breakthrough-2nm-chip-13920159.html