A former Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) engineer was sentenced to 10 years in prison today for stealing the company’s proprietary data to help Tokyo Electron win more equipment orders from TSMC.
The former TSMC employee, named Chen Li-ming (陳力銘), worked in marketing at Tokyo Electron Taiwan and obtained the trade secrets from former coworkers in order to win an equipment supply contract for TSMC’s advanced 2-nanometer (nm) process.
Charges included contraventions of the National Security Act (國家安全法) for unlawfully obtaining trade secrets and leaking them to Tokyo Electron.
Photo: Bloomberg
Today’s ruling by the Intellectual Property and Commercial Court may be appealed.
Tokyo Electron was court-ordered to pay a NT$150 million (US$4.77 million) fine, suspended for three years.
The penalty included NT$100 million in compensation to TSMC and NT$50 million to the public treasury.
As prosecutors found the company to bear supervisory responsibility over Chen and corporate criminal liability, they also indicted the firm on four counts under the National Security Act.
As further investigation found that the company had not made every effort to prevent the breach, and its cloud storage still contained core critical technologies from TSMC, prosecutors in January filed additional indictments.
Two then-engineers at TSMC, Wu Ping-chun (吳秉駿) and Ko Yi-ping (戈一平), were also sentenced to three years and two years respectively, while another TSMC employee named Chen Wei-chieh (陳韋傑) was sentenced to six years.
Tokyo Electron Taiwan employee Lu Yi-yin (盧怡尹) was handed 10 months suspended for three years, and was ordered to pay NT$1 million to the public treasury.
Chen Li-ming, Wu and Ko have been detained incommunicado since September last year, after the case first came to light in July.
Chen Li-ming previously worked as an engineer at TSMC’s Fab 12 before joining the marketing department at Tokyo Electron, one of TSMC’s suppliers, the indictment by the Intellectual Property Prosecutors Office of the High Prosecutors’ Office said.
From mid-2023 to the first half of last year, he helped Tokyo Electron secure more equipment supply positions for TSMC’s advanced processes by asking Wu and Ko to provide trade secrets on multiple occasions, it said.
Tokyo Electron allegedly reproduced these materials and used them to review and improve the performance of its etching equipment to win a bid at TSMC for the latest 2nm process, it said.
TSMC detected irregularities and conducted an internal investigation, filing a complaint on July 8 last year.
Prosecutors directed investigators to carry out searches and interrogations from July 25 to 28, after which Chen Li-ming, Wu and Ko were detained.
Tokyo Electron has previously said that the matter had no impact on its financial results.
It also said it would further reinforce compliance and audit systems across the group, including its Taiwan unit, to "ensure that such incidents never occur again."
Additional reporting by Reuters
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