Leak of TSMC’s Advanced 2nm Manufacturing Technology May Result in Up to 14 Years of Jail Time for Offenders

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Former TSMC Employees Could Face Up to 14 Years in Prison for Trade Secret Violations

Prosecutors in Taiwan are pursuing substantial prison sentences of up to 14 years for former employees of Taiwan Semiconductor Manufacturing Company (TSMC) implicated in the unauthorized dissemination of sensitive trade secrets. The investigation unveiled that a former worker solicited critical information regarding TSMC’s advanced 2-nanometer manufacturing technology from current staff.

Former Employee’s Alleged Link to Tokyo Electron Raises Concerns

Reports indicate that the individual at the center of these allegations is a former TSMC employee who has recently joined the marketing division at Tokyo Electron, a major supplier of chip fabrication equipment to TSMC. This connection has fueled speculation within industry circles concerning the possible breach of a vital manufacturing process.

Tokyo Electron does not only provide crucial machinery but is also responsible for technologies used in the etching processes essential to semiconductor manufacturing. According to Taiwanese authorities, the ex-TSMC employee, who has been identified as Chen, intentionally requested information about TSMC’s cutting-edge 2-nanometer technology from current employees. This was allegedly aimed at enhancing the performance of equipment utilized in the etching process at Tokyo Electron.

Understanding Etching in Semiconductor Fabrication

In the intricate world of semiconductor manufacturing, etching is a pivotal process where material is selectively removed from a silicon wafer to create precise circuit designs. The investigation revealed that Chen had approached TSMC employees for these proprietary details, fully aware of the company’s stringent confidentiality agreements with its partners.

Tokyo Electron's coater used in semiconductor fabrication — The Tokyo Electron Lithus Pro Z photoresist coater/developer operates alongside ASML’s advanced EUV machines in AI chip manufacturing. Image: Tokyo Electron

Government Actions and Legal Proceedings Underway

TSMC, upon discovering these transgressions, promptly notified Taiwanese authorities, triggering a thorough investigation. Prosecutors have since defined charges against three individuals associated with the breach: one former TSMC employee and two others still working within the company at the time.

The principal accused, Chen, faces a robust indictment encompassing five years for stealing trade secrets intended for overseas use, three years for stealing trade secrets, and an additional eight years for breaches concerning national security laws relevant to core trade secrets.

In addition, one current TSMC employee has been charged with utilizing trade secrets abroad along with the theft of trade secrets, while the other employee faces charges solely for the overseas use of trade secrets.

TSMC’s Strategic Role in Taiwan’s National Security

TSMC plays a crucial role not only in the semiconductor industry but also in Taiwan’s national security framework. The island relies heavily on TSMC’s manufacturing capabilities and its significant share in the global chip market as a defensive measure against potential aggression, particularly from China. Consequently, the protection of its intellectual property is of utmost importance, safeguarded by strict Taiwanese laws.

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