A Taiwanese court has handed down a 10-year prison sentence to a former employee of Japanese chip equipment maker Tokyo Electron for stealing trade secrets from Taiwan Semiconductor Manufacturing Co. (TSMC), in a landmark case highlighting the island's efforts to protect its advanced semiconductor industry.
Landmark Ruling Under National Security Act
On Monday, the Intellectual Property and Commercial Court in Taiwan sentenced Chen Li-ming, who previously worked at TSMC before joining Tokyo Electron's Taiwanese subsidiary, to a decade behind bars. The court also fined Tokyo Electron 150 million new Taiwan dollars ($5 million) and imposed sentences of up to six years on four other individuals involved in the case.
The heavy penalties, applied under Taiwan's national security act and other statutes, underscore the government's determination to safeguard the island's cutting-edge technology and semiconductor sector, which are crucial to its export-driven economy amid the booming artificial intelligence industry.
Details of the Trade Secret Theft
According to Judge Chang Ming-huang, Chen leveraged his relationships with former TSMC colleagues to illegally access, photograph, and copy confidential trade secrets. He then passed these materials to Tokyo Electron's headquarters in Tokyo, aiming to help the company upgrade its technologies and improve its bids as a TSMC supplier.
“Chen's primary motivation was to enhance his personal work performance,” Judge Chang stated, but his actions jeopardized Taiwan's competitiveness and economic security, particularly in the chipmaking sector.
TSMC, one of the world's most valuable companies and a key supplier to Nvidia and Apple, declined to comment on the ruling.
Company Responses and Investigations
Taiwanese prosecutors indicted Chen and others in August 2025 for alleged trade secret theft. At that time, Tokyo Electron issued a statement saying it had dismissed the employee involved but noted that its internal investigation had not confirmed evidence of confidential information being leaked.
Following the court's decision, Tokyo Electron stated on Monday that it takes “the court’s finding with the utmost seriousness” and plans to strengthen its “information management systems and other relevant measures.” However, it emphasized that neither the court nor its own probe found any organizational involvement by the company.
