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Tokyo Electron implicated in TSMC secret theft. Semiconductor manufacturing equipment maker Tokyo Electron was caught up in widening legal action initiated by TSMC over alleged theft of trade secrets, with Taiwanese prosecutors charging the Japan-based company's local unit with national security violations, Reuters reported. Tokyo Electron failed to take necessary steps to prevent the alleged theft by an employee referred to as Chen who was indicted in August, Reuters reported prosecutors as stating. Prosecutors reportedly stated the company's unit in Taiwan had a legal duty to supervise Chen and "should bear corporate criminal liability". The unit could be fined up to TWD120 million ($3.8 million). In August, Taiwanese prosecutors charged three staff for allegedly attempting to access TSMC's confidential 2nm development and production data. Chen is a former TSMC employee who joined Tokyo Electron and was one of those indicted. Meanwhile, TSMC is taking legal action against a former senior executive suspected of stealing trade secrets when he retired and moved to a job at rival Intel.

Tokyo Electron charged in Taiwan over alleged TSMC secrets theft. Taiwanese prosecutors have charged Tokyo Electron for allegedly failing to prevent the theft of trade secrets from Taiwan Semiconductor Manufacturing Co. (TSMC), escalating a dispute between two major players in the chip industry. Tokyo Electron, a Japanese semiconductor equipment supplier, faces several counts related to business secret and national security laws, with prosecutors seeking a fine. Authorities did not accuse Tokyo Electron of using TSMC's proprietary information. The indictment follows the August charging of three individuals, including a former TSMC and Tokyo Electron employee, for allegedly conspiring to steal intellectual property. Prosecutors allege the former employee attempted to access TSMC's confidential data and persuaded ex-colleagues to share technology. Tokyo Electron is reviewing the details and has dismissed an employee in Taiwan connected to the case. Taiwan is seeking jail terms for the individuals charged, citing national security concerns. Food for thought. Penalties can reach up to 12 years under Taiwan's National Security Act when 'national core key technologies' are implicated. * Tokyo Electron faces charges under Taiwan's Trade Secrets Act and the stricter National Security Act. The latter sets 5 to 12 years for misusing core technologies, compared with 1 to 10 years under the Trade Secrets Act 1. * The National Security Act targets items on a government list that is expected to include semiconductor and integrated circuit (IC) design technologies. Prosecutors stepped up action after engineers moved to jobs in China 1. * The company risks a fine, while three employees could face prison. Taiwan is pressing criminal cases beyond civil remedies such as damages, injunctive relief (court orders to stop misuse), and destruction orders 2. * The matter fits Taiwan's 2022 amendment to guard "national core key technologies" 2. Compliance implications for semiconductor equipment vendors operating in Taiwan. * Other equipment suppliers with Taiwan operations could face similar exposure if prosecutors decide confidentiality steps fell short 2. * Taiwan law requires reasonable safeguards for a trade secret. Examples include non-disclosure agreements and document labels. Companies also use restricted access controls and information tracking systems, or regular employee training 2. * Prosecutors can charge a company over staff misconduct even when no corporate use occurred. Manage insider access at customer sites 2. * Taiwan's Trade Secrets Act gives six months to file a criminal complaint under article 13-1 after identifying the offender, so firms must act fast once potential theft comes to light 2. Recent Tokyo Electron developments. How would you feel if you could no longer use Tech in Asia?

Taiwan charges Tokyo Electron in TSMC secrets theft case. Taiwanese prosecutors charged Tokyo Electron for failing to prevent staff from allegedly stealing Taiwan Semiconductor Manufacturing Co. trade secrets, escalating a dispute involving two Asian linchpins of a chip industry increasingly vital to national and economic security. Prosecutors indicted the Japanese company on several counts of violating business secret and national security laws, they said in a statement on Tuesday. They're asking a local court to rule in favor of their request for Tokyo Electron pay a fine for failing in its duty to prevent the alleged theft. "Tokyo Electron has not done its best to carry out preventive measures," prosecutors said. They did not accuse the Japanese firm of utilizing TSMC's proprietary data. The indictment follows the August charging of three people - including a former TSMC and Tokyo Electron employee - for allegedly conspiring to steal intellectual property from Taiwan's largest and most important company. TSMC, chipmaker to Apple and Nvidia, reported the alleged theft to the authorities this year, triggering a probe that's cast a spotlight on the sensitive nature of chipmaking technology. Taiwan makes the bulk of the world's most advanced semiconductors and its companies have regularly been targeted for their intellectual property by entities with ties to Beijing, which is pushing hard to develop its own chip capabilities. Taiwan in 2025 has been flexing the economic clout amassed from a growing dominance of chipmaking. In September, the island threatened to choke off supply of the components - used in most electronics including EVs and phones - to South Africa. Last month, prosecutors searched the homes of a former TSMC executive who joined Intel, after the Taiwanese firm accused him of potentially transferring intellectual property. The U.S. company has rejected those allegations. Tokyo Electron said it's still trying to verify the details of the announcement from the Taiwanese authorities. TSMC didn't immediately respond to a request for comment outside normal business hours. The dispute has also put lower-profile Tokyo Electron - a maker of equipment for TSMC and other manufacturers - under unusual scrutiny. Taiwan is seeking jail terms for the individuals indicted, citing a threat to the island's national security. Among those was the former employee, identified by the surname Chen, who allegedly tried to gain access to TSMC's confidential data while at Tokyo Electron. According to Taiwanese prosecutors, the ex-employee convinced former TSMC co-workers to share proprietary technology. Tokyo Electron previously said it had fired an employee at a Taiwan unit in connection with the case, and is cooperating with the investigation. It's stressed a firm policy against wrongdoing by its staff and reiterated it had seen no evidence that sensitive data was leaked to a third party. The case had previously raised questions about whether Tokyo Electron would have any motivation to steal TSMC trade secrets. Alongside Applied Materials and Lam Research, Tokyo Electron plays a crucial supporting role to chipmakers including TSMC, Samsung Electronics and Intel, making machines that coat, etch, process and clean silicon wafers to create semiconductors. Taiwan prosecutors had accused Chen of trying to steal technology to help improve the Japanese company's etching equipment, and win TSMC's certification for use in cutting-edge 2-nanometer chipmaking processes. They also said the three people who were indicted intended to use TSMC's proprietary technology overseas. The Taiwanese company has said it will continue to strengthen its monitoring systems and will work closely with regulatory authorities as necessary to protect its competitiveness.