TLDR
- Chen Li-ming, previously employed at TSMC, received a 10-year prison term for industrial espionage involving semiconductor trade secrets
- Three additional engineers were sentenced to prison terms ranging between two and six years
- Tokyo Electron’s Taiwan subsidiary faces a NT$150 million fine (approximately $4.8 million USD)
- Taiwan’s first application of national security legislation to prosecute theft of essential semiconductor technology
- The breach was discovered through TSMC’s internal monitoring systems detecting suspicious data access patterns in July
On Monday, Taiwan’s Intellectual Property and Commercial Court delivered a landmark ruling, sentencing a former Taiwan Semiconductor Manufacturing Company employee to a decade behind bars for stealing proprietary trade secrets.
Chen Li-ming had transitioned from TSMC to Tokyo Electron’s Taiwan operations when he exploited relationships with his previous colleagues to unlawfully obtain, photograph, duplicate, and transmit classified documents.
The confidential information was utilized to assist Tokyo Electron in advancing its technological capabilities and strengthening its competitive position when bidding for TSMC supplier contracts.
Three additional engineers who remained on TSMC‘s payroll during the incidents also faced prosecution. The court handed them prison sentences between two and six years.
A separate conviction was handed to a Tokyo Electron supervisor who directed the destruction of TSMC’s confidential materials. This individual received a 10-month sentence with a three-year suspension.
This prosecution marks the inaugural use of Taiwan’s national security laws in a case centered on the theft of critical semiconductor technology. Government officials report a dramatic increase in corporate espionage targeting sensitive technological information over the last ten years.
Court Fines Tokyo Electron and Orders Payout to TSMC
The Taiwan subsidiary of Tokyo Electron was ordered to pay NT$150 million, equivalent to roughly $4.8 million USD. The judicial ruling mandates that NT$100 million be transferred directly to TSMC, while the balance of NT$50 million will be paid to Taiwan’s state treasury.
The corporation faced indictment as a legal entity in these proceedings.
In response to the verdict, Tokyo Electron stated it views the decision with gravity and pledges to enhance its information security protocols. The firm emphasized that neither law enforcement nor the court discovered any systemic misconduct or external leakage of confidential materials attributable to the company.
Tokyo Electron further indicated the ruling is not anticipated to affect its financial operations.
How TSMC Caught the Theft
Last July, TSMC’s internal cybersecurity infrastructure identified abnormal access patterns to restricted data, launching the subsequent investigation.
A court representative verified that according to evidence supplied by TSMC, Tokyo Electron did not disseminate any of the compromised materials beyond its organization. The precise settlement arrangements between the two corporations remain under confidentiality agreements.
The court determined that Tokyo Electron inadequately monitored Chen’s activities. His internal performance reviews had specifically highlighted his capacity to “leverage existing client resources” and acquire intelligence on customers and competitors.
TSMC produces semiconductors for technology giants such as Apple and Nvidia. The chipmaker has pledged continued vigilance against intellectual property theft to safeguard its market position.
Tokyo Electron confirmed its full cooperation with investigating authorities throughout the process.
Both Tokyo Electron’s Taiwan branch and all individual defendants retain the right to challenge the verdict through appeals.
Stock prices for both corporations showed minimal reaction following the announcement of the ruling.
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