TAIPEI (Taiwan News) — A Taiwan court ruling in a major semiconductor trade secret case has put scrutiny on Tokyo Electron’s relationship with TSMC, Nikkei Asia reported Wednesday.
The Intellectual Property and Commercial Court on Monday sentenced former TSMC engineer Chen Li-ming (陳力銘) to 10 years in prison under provisions of the National Security Act covering theft of core critical technologies, per Reuters. The verdict can be appealed.
The court said Chen was guilty of multiple offenses, including unauthorized use of trade secrets for foreign use. The case marks the first ruling under amended national security provisions targeting such violations.
Chen’s lawyers stated Tuesday that Chen expressed deep regret for his actions, per CNA. They said he views his experience as a warning to other technology professionals.
In a related decision, the court also found that Tokyo Electron Taiwan failed to properly supervise the employee involved. It imposed a NT$150 million (US$4.75 million) fine on the subsidiary, including compensation to TSMC and a payment to the public treasury, with a suspended sentence.
Tokyo Electron said it takes the ruling seriously and will strengthen its global information management and compliance systems, per Liberty Times. It stressed that there was no organizational involvement and no broader leakage of confidential information.
The company added it has reached a settlement with TSMC and does not expect any impact on earnings or operations. It said compliance with legal and ethical standards remains a core management principle.
TSMC is the world’s leading contract chipmaker and plays a key role in producing advanced semiconductors for AI. Its position makes it a key partner for equipment suppliers seeking to develop cutting-edge manufacturing tools.
Companies such as Tokyo Electron rely on close collaboration with TSMC to refine production equipment, using the foundry’s feedback to improve technology deployed across global markets. This makes access to TSMC highly competitive among chip tool makers.
The court said the case involved a former Tokyo Electron Taiwan employee who had previously worked at TSMC and unlawfully accessed sensitive data. The information was used to improve etching equipment, highlighting risks tied to talent mobility in the industry.
Analysts said the case may lead to stricter oversight of information handling among suppliers, even as Tokyo Electron remains a key partner that would be difficult for TSMC to replace, per Nikkei Asia.
“Going forward, equipment makers will probably be held to a higher standard of legal compliance,” Research Institute for Democracy, Society and Emerging Technology CEO Chang Chih-cheng (張智程) said.
