Ex-Tokyo Electron Employee Sentenced to 10 Years Over TSMC Trade Secret Theft

A court in Taiwan has handed down a 10-year prison sentence to Chen Li-ming, a former employee linked to both TSMC and Tokyo Electron, following a high-profile case involving the theft of sensitive chip technology from TSMC. Alongside Chen, other former TSMC staff received prison terms ranging from two to six years.

In addition to the jail sentences, Tokyo Electron's Taiwan unit was slapped with a T$150 million fine-about $5 million USD-marking a significant penalty amid accusations of violating the National Security Act. The charges center around an effort by the defendants to help Tokyo Electron secure more equipment orders from TSMC.

Four of the five defendants, including Chen and the local Tokyo Electron branch, pleaded guilty during the trial held in New Taipei. The court clarified that they have the right to appeal the verdict. One former Tokyo Electron worker received a suspended sentence of ten months, which is to remain inactive for three years.

This case has been among the most notable involving the alleged misappropriation of Taiwan's core national technologies in recent memory. TSMC, known globally for manufacturing chips for tech giants such as Nvidia, Apple, and Google, remains central to the country's semiconductor dominance.

Tokyo Electron has previously stated that the incident had no bearing on its financial outcomes and committed to strengthening compliance and auditing procedures within its global operations, especially in the Taiwanese unit, to prevent future breaches.

The news seems to have had a positive short-term market effect, with TSMC shares closing up by 3.7% on the day of the announcement.

With the global semiconductor industry under intense competitive pressures and rising concerns over intellectual property theft, this case highlights the sensitive nature of trade secrets in tech manufacturing. The legal action signals Taiwan's tough stance on protecting its technological assets.

How this will affect supply chain dynamics or equipment procurement strategies in the semiconductor sector remains something to watch closely as the industry continues its rapid evolution.