On December 3, Taiwanese authorities announced that the Taiwan branch of leading semiconductor equipment manufacturer Tokyo Electron Limited (TEL) and several employees have been formally indicted for violating the National Security Act and the Trade Secrets Act. Prosecutors are seeking a fine of up to NT$120 million.

The indictment stems from a case in which a former TEL employee was accused in August of stealing confidential information from major chipmaker TSMC. In a statement, prosecutors said this marks Taiwan's first-ever corporate indictment under the National Security Act for alleged theft of core and sensitive semiconductor technologies. If convicted, TEL's Taiwan subsidiary could face the maximum fine of NT$120 million.

After questioning the former employee—identified as Chen—and related TEL staff, prosecutors concluded that the company had a legal obligation to supervise Chen. They stated that while TEL maintained general internal guidelines, it lacked concrete preventive controls or management measures to stop such misconduct. As a result, prosecutors determined that the company should bear corporate criminal liability.

TEL previously said in August that it had not confirmed whether the company itself was implicated when Taiwan first filed charges against the ex-employee.

This development follows an earlier indictment in August 2025, when prosecutors charged three individuals: a former engineer who had worked at both TSMC and TEL, and two current TSMC engineers. Prosecutors alleged that after joining TEL's Taiwan subsidiary, the former employee used personal connections to persuade former colleagues to steal confidential 2nm process data, which TEL could use to improve its etching equipment and seek certification for TSMC's most advanced production lines.

TSMC reported the case to authorities, emphasizing that its 2nm process is one of the world's most advanced semiconductor technologies, with significant commercial value and strategic sensitivity. Investigators later found that despite TEL having internal policies in place, it had not implemented concrete measures to prevent employees from stealing trade secrets—a failure that prosecutors now classify as "management negligence."

Prosecutors Seek NT$120 Million Fine; Case Marks First Corporate Indictment for Extraterritorial Use of Taiwan's Core Tech

According to a December 3 statement from Taiwan's High Prosecutors Office, the company-level indictment includes four charges related to violations of the Trade Secrets Act and National Security Act. Prosecutors are requesting fines of NT$40 million, NT$8 million, NT$40 million, and NT$40 million respectively, totaling NT$120 million.

Investigators found that former TSMC engineer Chen Liming, who joined TEL as a marketing and product manager, sought help from former colleagues between August 2023 and May 2025 to obtain confidential data. The engineers allegedly used a laptop to remotely access TSMC systems and photographed sensitive process and experimental results using a mobile phone on at least four occasions. Some of the stolen data was later entered into TEL work reports.

In August this year, Taiwan's Intellectual Property and Commercial Court Prosecutors Office indicted Chen and the two TSMC engineers on charges of stealing TSMC's core trade secrets. Prosecutors sought prison sentences of 14 years, 9 years, and 7 years respectively. The case is now being heard by the Intellectual Property and Commercial Court, and all three defendants remain in custody.

The High Prosecutors Office stated that after examining testimony, evidence, and TEL's written responses, it concluded that TEL had a statutory obligation to supervise Chen but failed to implement any concrete preventive mechanisms beyond general internal warnings. This lack of oversight formed the basis for the corporate indictment.

Looking forward, the case is expected to draw significant attention across the semiconductor industry, particularly as global competition intensifies for next-generation nodes such as 2nm.