Full Breakdown
Taiwan Court Hands Down Heavy Sentences in TSMC Trade-Secrets Case Involving Tokyo Electron
4/27/2026, 10:04:45 PM
Sentencing Overview
On 27 April 2026 Taiwan’s Intellectual Property and Commercial Court sentenced former TSMC engineer Chen Li-ming to 10 years in prison for violating the National Security Act and the Trade Secrets Act. Three other ex-TSMC engineers—Wu Ping-jun (3 years), Ko I-ping (2 years) and Chen Wei-chieh (6 years)—received terms ranging from two to six years. A Tokyo Electron employee, Lu I-yin, was given a 10-month suspended sentence for destroying evidence. The court also imposed a NT$150 million (? US$5 million) fine on Tokyo Electron’s Taiwan unit, directing NT$100 million to TSMC and NT$50 million to the state treasury.
Background: Strategic Importance and Legal Framework
TSMC, the world’s largest contract chipmaker, supplies AI-driven products for Nvidia, Apple, Google and others. Taiwan classifies semiconductor processes below 14 nm as “core national technologies,” protecting them under the National Security Act. The case centers on alleged theft of 2-nm process data (and, according to one source, the A14 node) that could affect Taiwan’s export-oriented economy and its position in the global AI-chip supply chain.
Key Figures and Organizations
- Chen Li-ming – former TSMC yield-department engineer, later marketing staff at Tokyo Electron Taiwan.
- Tokyo Electron – Japanese semiconductor-equipment maker; its Taiwan subsidiary was fined and ordered to improve oversight.
- TSMC – victim of the alleged theft; maintains a zero-tolerance stance on trade-secret breaches.
- Taiwan prosecutors – charged the defendants in August 2025 under the National Security Act and Trade Secrets Act, later expanding the indictment in January 2026.
Timeline of Investigation and Prosecution
- H2 2023 – H1 2024: Chen allegedly solicits confidential data from current TSMC engineers, photographs and copies it.
- July 2025: TSMC’s internal audit discovers irregularities; a formal complaint is filed on 8 July.
- August 2025: Prosecutors indict Chen and three co-defendants.
- January 2026: Indictment expanded to include additional individuals and corporate liability.
- 27 April 2026: Court delivers sentences and fines.
Penalties and Technical Details
The stolen information included schematics for sub-14 nm processes, gases, chemicals and equipment specifications stored on Tokyo Electron’s cloud system. The court found that the reproduced data involved TSMC’s 2-nm node and, in one judgment, the A14 process. Fines total NT$150 million (? US$4.8-5 million), with a three-year suspended enforcement period for the corporate penalty.
Official Statements & Responses
- Tokyo Electron: Emphasised that the ruling is taken “with the utmost seriousness,” asserted no organisational involvement, and pledged to strengthen information-management systems.
- TSMC: Reiterated a “zero-tolerance policy toward any actions that compromise the protection of trade secrets or harm the company’s interests” and announced plans to further tighten internal controls.
Conflicting Reports & Gaps
Sources differ on the exact technology cited (some reference the 2-nm node, others the A14 process) and on the fine’s breakdown (some list a single NT$150 million fine, others separate NT$100 million to TSMC and NT$50 million to the treasury). No source provides details on any appeal outcomes or on potential civil damages beyond the court-ordered compensation.
Verbatim Quotes
- “We take the court’s finding with the utmost seriousness,” — Tokyo Electron spokesperson
- “maintains a zero-tolerance policy toward any actions that compromise the protection of trade secrets or harm the company’s interests” — TSMC statement
- “Chen's motivation was mainly to “improve his personal work performance,” Chang said, but he jeopardized the competitiveness and economic security of Taiwan and its chipmaking industry.” — Judge Chang Ming-huang
- “failed to properly fulfil its corporate social responsibility in supervising its employees” — Taiwan Intellectual Property and Commercial Court
- “During the investigation, TSMC said in a statement that Tokyo Electron Taiwan was not a competitor, and that the trade secrets obtained by Chen were not disclosed to any third party.” — Tokyo Electron statement
- “The court stated that Chen’s actions posed risks to TSMC’s trade secrets and Taiwan’s economic security.” — Court statement
Implications for Taiwan’s Economic Security
The verdict underscores Taiwan’s resolve to protect its semiconductor know-how, signaling to foreign suppliers that breaches of core-technology safeguards will trigger severe criminal and financial penalties. By linking trade-secret theft to national-security statutes, the ruling aims to deter future espionage and preserve the island’s strategic advantage in the global AI-chip market.
