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Taiwanese prosecutors indict Tokyo Electron Taiwan for misappropriation of TSMC trade secrets
Monday, January 5, 2026 at 11:42 AM
Taiwanese prosecutors have issued additional charges against Tokyo Electron's Taiwan subsidiary for allegedly obtaining TSMC trade secrets. Investigators discovered that the subsidiary's cloud storage still contained TSMC proprietary data. The company and three individuals face potential fines totaling up to 145 million Taiwan dollars under the National Security Act and Trade Secrets Act. Tokyo Electron stated the parent company is not indicted and expects no material impact on financial performance.
Context
Taiwanese authorities have indicted the local unit of Tokyo Electron (TEL) after discovering TSMC's proprietary 2nm process secrets on TEL servers. A probe concluded in late 2025 found that a former TSMC engineer who joined TEL allegedly misappropriated manufacturing data to enhance TEL's etching equipment performance. Prosecutors determined TEL bears corporate criminal liability for failing to implement specific preventive measures, marking the first such indictment under Taiwan’s National Security Act for "national core technologies."
The legal action highlights the intensifying security environment surrounding the semiconductor supply chain. Prosecutors are seeking a fine of NT$120 million (approximately US$3.8 million) against TEL, while the individuals involved face up to 12 years in prison. For investors, this marks a critical shift toward corporate accountability for data breaches. As TSMC moves to protect its 2nm leadership, the case underscores that equipment vendors now face extreme legal and reputational risks for any security lapses within the Taiwanese ecosystem.
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