TSMC's First-Ever National Security Trade Secret Leak! Former Deputy Manager Steals 21 Confidential Files, Prosecutor Seeks 7-Year Sentence

On the 20th, Taiwan's High Prosecutors Office for Intellectual Property announced the indictment of a former deputy manager at Taiwan Semiconductor Manufacturing Company (TSMC) for violating the National Security Act and Trade Secrets Act—the first case in Taiwan involving the attempted leakage of national core technology to China. The prosecutor alleges that the defendant, surnamed Chen, conspired with a Hong Kong national to illegally reproduce 21 confidential technical documents from TSMC to support a semiconductor venture in China, and is seeking a 7-year prison sentence to underscore the severity of cross-border technology theft.

The case originated from an investigation into a spy network led by a Hong Kong national, Ding Xiaohu, operating in Taiwan under instructions from Huang, a director at the Nanning Station of the Political Work Department of China's Central Military Commission. Ding frequently entered Taiwan under the guise of business or tourism to collect sensitive information on Taiwan's semiconductor industry. He recruited a Taiwanese national surnamed Huang, who then introduced him to Chen, then a deputy manager at TSMC.

Between May 2023 and February 2024, Chen collaborated with Ding to establish the 'China Semiconductor Materials Analysis Company' (CSMAC) in China. Chen drafted the 'Blue Ocean Plan,' a blueprint for building a semiconductor manufacturing base in China, aiming to gradually erode Taiwan's global competitive edge by poaching skilled semiconductor professionals.

To prove his technical expertise to Chinese investors and experts, Chen unlawfully reproduced 21 classified documents—comprising both national security-related and general trade secrets—from TSMC and took them home for review, intending to use them in China. TSMC detected the breach through internal audits and successfully recovered all copied documents.

On May 28, prosecutors and investigators searched five locations, interviewed three individuals, and questioned one witness. Chen was subsequently detained by the Intellectual Property and Commercial Court and remains in custody without visitation rights. After extensive interrogation of Chen and witnesses, along with analysis of digital evidence, the High Prosecutors Office concluded its investigation on the 20th, indicting Chen while dismissing charges against Ding due to his death.

The prosecution emphasized that TSMC is a world-leading semiconductor manufacturer, and its technological edge is vital not only to Taiwan's economy but also to its strategic competitiveness in a tense geopolitical environment. Despite understanding this, Chen disregarded industrial ethics and fair competition, illegally acquiring sensitive information to advance China's semiconductor ambitions. The prosecutor has therefore requested a 7-year sentence.

The High Prosecutors Office stated: 'The technological底线 must not be crossed; the legal红线 must not be challenged.' As the guardian of Taiwan's core technological security, it vowed to swiftly and strictly prosecute any attempt to undermine Taiwan's tech advantage or illegally transfer critical technologies to foreign or Chinese entities, ensuring the continued global leadership of Taiwan's 'national fortress' semiconductor industry.