TSMC supply and trade‑secret fallout

Taiwan’s Intellectual Property and Commercial Court sentenced former Tokyo Electron employee Chen Li-ming to 10 years in prison on April 27 in a trade-secrets case tied to TSMC. (asahi.com) (abcnews.com) The court also fined Tokyo Electron’s Taiwan unit T$150 million, about $5 million, and gave four other defendants prison terms ranging from 10 months suspended to six years. (asahi.com) (aljazeera.com) Judge Chang Ming-huang said Chen Li-ming had worked at TSMC before joining Tokyo Electron’s Taiwan subsidiary and used former colleagues to obtain confidential materials. The court said he photographed, copied and passed along the files to help Tokyo Electron improve equipment bids to TSMC. (abcnews.com) (asahi.com) The stolen material covered TSMC’s 2-nanometer process and its A14 technology, which the court described as key to preserving the company’s lead in advanced chips. Taiwan classifies semiconductor technologies below 14 nanometers as national core technologies under tighter legal protection. (asahi.com) That matters because TSMC sits at the center of the leading-edge chip supply chain for Nvidia, Apple and Google, and Taiwan treats those manufacturing recipes as an economic-security asset. The case became one of Taiwan’s highest-profile prosecutions under its National Security Act. (asahi.com) (abcnews.com) Tokyo Electron said it took the ruling “with the utmost seriousness” and would strengthen information management, while also saying neither the court nor its own probe found organizational involvement by the parent company. TSMC said it has a zero-tolerance policy for trade-secret violations. (abcnews.com) (asahi.com) The ruling lands as TSMC is still trying to expand the same advanced production lines the case centered on. TSMC reported on April 16 that 3-nanometer chips made up 25% of first-quarter wafer revenue and guided second-quarter revenue to $39.0 billion to $40.2 billion. (tsmc.com 1) (tsmc.com 2) Supply-chain reports cited by DigiTimes and others say TSMC is lifting 3-nanometer monthly capacity toward 180,000 wafers and pushing 2-nanometer capacity toward 100,000 wafers by the end of 2026. Those figures have not been detailed in TSMC’s own earnings release, but they line up with management’s comments about strong demand for leading-edge processes. (digitimes.com) (wccftech.com) (tsmc.com) So the same week brought two signals from Taiwan’s chip industry: courts are willing to impose long prison terms for stealing advanced-node know-how, and TSMC is still scrambling to make more of it. (asahi.com) (tsmc.com)