TAIPEI (Taiwan News) — Prosecutors indicted a former deputy manager at TSMC surnamed Chen (陳) on Monday for allegedly stealing the chipmaker's core technologies with the intent of transferring them to China.
The Intellectual Property Prosecution Division of the High Prosecutors Office concluded its investigation Monday, charging Chen with violations of the National Security Act and the Trade Secrets Act while recommending a seven-year prison sentence.
The indictment is linked to a separate investigation into an alleged Chinese espionage network led by Hong Kong resident Ding Xiaohu. Prosecutors allege Ding planned to establish a semiconductor materials analysis company, CSMAC, in China using stolen technology, according to a High Court press release.
Prosecutors allege Chen devised a plan known as the "Blue Ocean Project" to recruit TSMC employees to work in China and facilitate the transfer of Taiwan's semiconductor expertise. Investigators searched five locations and questioned Chen and other witnesses. After reviewing records and evidence, prosecutors concluded there was sufficient evidence to indict him.
According to the High Court, TSMC's technological leadership is critical to Taiwan's economy and international competitiveness. The court said Chen knowingly violated industry ethics and competitive norms, seriously threatening Taiwan's semiconductor industry and national interests, as it recommended a seven-year prison sentence as an appropriate deterrent, per the press release.
The investigation found Chen allegedly worked with Ding between May 2023 and February 2024. Prosecutors said Chen copied 21 files containing core national technologies and other trade secrets, removed them from TSMC for study at his residence, and intended to use the information in China, per LTN.
TSMC detected the alleged breach through an internal investigation and recovered the copied technical documents before they could be transferred, according to prosecutors.
Prosecutors said Ding repeatedly entered Taiwan under the guise of business and tourism to recruit Taiwanese military personnel and obtain military secrets, resulting in indictments in November, though Ding died in February. TSMC declined to comment on the latest indictment on Monday.
