TSMC Initiates Legal Action Over Potential Trade Secret Breach in Advanced Chip Technology

TSMC cracks down on potential trade secret breach, initiates legal action

Aug 5 (Reuters) - Taiwan Semiconductor Manufacturing Co (2330.TW), opens new tab said on Tuesday it had launched legal proceedings and taken disciplinary action against employees involved in potential trade secret leaks after detecting unauthorized activities during routine monitoring. TSMC said in an emailed statement to Reuters that its "comprehensive and robust monitoring mechanisms" enabled early identification of the issue, leading to swift internal investigations and strict measures against the personnel involved. The case, now under judicial review, prevents the company from providing further details, said TSMC, the world's top producer of advanced artificial intelligence chips. Nikkei Asia earlier reported that the breach involved several former employees suspected of attempting to obtain critical proprietary information on TSMC's 2-nanometer chip technology. Reporting by Bipasha Dey in Bengaluru and Wen-Yee Lee in Taipei; Editing by Harikrishnan Nair and Rashmi Aich Our Standards: The Thomson Reuters Trust Principles., opens new tab

Taiwanese authorities detain three over alleged theft of TSMC chip secrets

Aug 5 (Reuters) - Taiwanese authorities have detained three people for allegedly stealing technology trade secrets from Taiwan Semiconductor Manufacturing Co (TSMC) (2330.TW), opens new tab, the world's largest chip foundry, Taiwanese prosecutors said on Tuesday. The three were detained late last month after TSMC reported that an internal investigation had shown that former and current employees had illegally obtained information from the company, the Taiwan High Prosecutors Office said in a statement. The prosecutors office said another two people had been released on bail, and one more had been released. The three who have been detained - two current staff and one former employee - are suspected of violating Taiwan's national security law, it added. It did not disclose their identities apart from saying that the former staffer was surnamed Chen. Earlier on Tuesday, TSMC said it had launched legal proceedings and taken disciplinary action against employees involved in potential trade secret leaks after detecting unauthorised activities during routine monitoring. It said its "comprehensive and robust monitoring mechanisms" enabled early identification of the issue, leading to internal investigations and measures against the personnel involved. TSMC said the legal case, which is now under judicial review, prevented it from providing further details. Nikkei Asia earlier reported that the breach involved several former employees suspected of attempting to obtain critical proprietary information on TSMC's 2-nanometer chip technology. There were no immediate details on the suspected motives or whether any information had been passed on, and investigations are ongoing to determine the scope of the leak and whether any others were involved, the Nikkei report said. Taiwanese media outlet United Daily News said prosecutors and investigators had also searched the offices of Tokyo Electron, without citing where they had obtained the information. Tokyo Electron and the prosecutors' office declined to comment. TSMC's 2-nanometer chip technology is the most advanced technology in the semiconductor industry in terms of both density and energy efficiency, according to the company's website. The contract manufacturer, which counts AI industry darling Nvidia (NVDA.O), opens new tab, iPhone maker Apple (AAPL.O), opens new tab, and Qualcomm (QCOM.O), opens new tab among its customers, highlighted its zero-tolerance policy for trade secret violations, and said it would pursue offenders to the full extent of the law. Reporting by Bipasha Dey in Bengaluru and Wen-Yee Lee in Taipei; Editing by Harikrishnan Nair, Rashmi Aich and Hugh Lawson Our Standards: The Thomson Reuters Trust Principles., opens new tab

TSMC investigates possible leak of chip trade secrets

Taiwan authorities said they had arrested three people on suspicion of stealing trade secrets from Taiwan Semiconductor Manufacturing Company, the world's largest chip foundry. The Taiwan High Prosecutors Office announced the arrests Tuesday, after an investigation last month that was sparked when TSMC detected suspicious access to company files, it said. TSMC said it has taken disciplinary action against the individuals, some of them former employees, after it detected "unauthorized activities during routine monitoring, leading to the discovery of potential trade secret leaks," reported Reuters. As the world's largest supplier of semiconductor chips, TSMC is a lynchpin of the global tech industry, providing its products to companies like Nvidia and Apple. The investigation comes as the global race to develop artificial intelligence heats up, requiring ever more advanced chips. Rising tensions between the U.S., China, and other countries has thrust the race into the limelight, making the intellectual property of companies like TSMC more coveted than ever. The firm has more than 200,000 trade secrets recorded internally, it has said. Prosecutors said they had searched the suspects' homes. They did not identify the suspects, except for one person's surname, Chen. TSMC said it has taken "strict" disciplinary action against those involved. "TSMC maintains a zero-tolerance policy toward any actions that compromise the protection of trade secrets or harm the company's interests," the company said, per CNBC. "Such violations are dealt with strictly and pursued to the fullest extent of the law. We remain committed to safeguarding our core competitiveness and the shared interests of all our employees." TSMC said the legal case is now under judicial review and so it could not give further details. Nikkei Asia reported that the breach involved former employees who were suspected of trying to get hold of critical information on TSMC's 2-nanometer chip technology, which is the most advanced tech in the industry in terms for both density and energy efficiency. It said there were no details on the motives of the suspects, or whether any information had actually been passed on. Investigations continue into the scope of the leak and whether other people were involved, the Nikkei reported. TSMC didn't immediately respond to Quartz's request for comment.

TSMC cracks down on potential trade secret breach, initiates legal action - The Economic Times

It remains unclear what the former employees intended to do with the information or whether it was leaked to external parties, with investigations ongoing to determine the scope of the leak, and whether additional parties were involved in the matter.TSMC, the world's main producer of advanced AI chips, has launched legal proceedings and taken disciplinary action against employees involved in potential trade secret leaks after detecting unauthorized activities during routine monitoring. Taiwan Semiconductor Manufacturing Company in an emailed statement to Reuters said on Tuesday that its "comprehensive and robust monitoring mechanisms" enabled early identification of the issue, leading to swift internal investigations and strict measures against the personnel involved. The case, now under judicial review, prevents the company from providing further details, TSMC said. Nikkei Asia earlier reported that the breach involved several former employees suspected of attempting to obtain critical proprietary information on TSMC's 2-nanometer chip technology. It remains unclear what the former employees intended to do with the information or whether it was leaked to external parties, with investigations ongoing to determine the scope of the leak, and whether additional parties were involved in the matter, the Nikkei report said. TSMC's 2-nanometer chip technology is the most advanced technology in the semiconductor industry in terms of both density and energy efficiency, according to the company's website. The contract manufacturer, which counts AI industry darling Nvidia, iphone maker Apple, and Qualcomm among its customers, highlighted its zero-tolerance policy for trade secret violations, and said it would pursue offenders to the full extent of the law. TSMC's recently secured a 300,000 H20 chipset contract from Nvidia.

Apple, Nvidia Supplier TSMC Flags Potential Espionage In 2nm Tech Leak, Takes Legal Action Against Former Employees - NVIDIA (NASDAQ:NVDA), Apple (NASDAQ:AAPL)

Taiwan Semiconductor Manufacturing Co. TSM, the world's largest contract chipmaker, has reportedly initiated legal proceedings against former employees suspected of attempting to steal critical 2-nanometer chip technology secrets. TSMC Launches Legal Action Over Trade Secret Breach The company detected unauthorized activities through routine monitoring systems and launched internal investigations, according to Reuters reports on Tuesday. TSMC serves major U.S. tech giants, including Apple Inc. AAPL, Nvidia Corp. NVDA, and Qualcomm Inc. QCOM. Investigation Targets Advanced Chip Technology The suspected breach involves TSMC's most advanced 2nm chip technology, representing the industry's cutting-edge in density and energy efficiency. Several former employees allegedly attempted to obtain proprietary information, though investigators haven't determined whether data reached external parties. TSMC recently secured a 300,000 H20 chipset contract from Nvidia, highlighting the strategic importance of protecting intellectual property. The case remains under judicial review, preventing the company from disclosing additional details. See Also: Trump Is Playing With Inflation Data, People Say -- Here's What We Know Market Impact Amid Trade Tensions The espionage allegations emerge as semiconductor stocks face headwinds from new tariffs imposed by the Trump administration. Taiwan faces duties between 20-39% under recent trade measures targeting 69 countries. Zero-Tolerance Policy Reinforced TSMC emphasized its "zero-tolerance policy" for trade secret violations and vowed to pursue legal action to the full extent, according to the report. The company's comprehensive monitoring mechanisms enabled early detection of the suspected breach. Read Next: OpenAI, Palo Alto, SoftBank Deals Power $2.6 Trillion Global M&A Boom -- Biggest Since 2021 Pandemic Peak Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Photo courtesy: Sundry Photography on Shutterstock AAPLApple Inc$203.830.24%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentum28.05Growth28.47Quality73.51Value9.82Price TrendShortMediumLongOverviewNVDANVIDIA Corp$180.670.37%QCOMQualcomm Inc$147.550.03%TSMTaiwan Semiconductor Manufacturing Co Ltd$239.750.31%Market News and Data brought to you by Benzinga APIs