Full Breakdown
Taiwan Court Sentences Former TSMC Engineer and Fines Tokyo Electron Over 2nm Trade-Secret Theft
4/28/2026, 8:10:40 AM
Verdict and Sentences
The Intellectual Property and Commercial Court in New Taipei City sentenced former TSMC engineer Chen Li-ming to 10 years for stealing trade secrets on TSMC’s 2-nm process. Three other ex-TSMC engineers received two- to six-year terms, and a former Tokyo Electron Taiwan employee got a 10-month suspended sentence. Tokyo Electron Taiwan was fined NT$150 million, with NT$100 million payable to TSMC and NT$50 million to the treasury.
Background & Context
Taiwan classifies semiconductor technologies below 14 nm as “national core key technologies” protected under the National Security Act. The act, usually reserved for matters threatening national interests, was invoked for the first time in a corporate trade-secret case, reflecting the island’s reliance on advanced chip manufacturing for economic security and the global AI supply chain.
Timeline
July 2025: TSMC’s security system flags anomalous data-access patterns.
August 2025: Prosecutors indict Chen Li-ming and four co-defendants for trade-secret theft and extraterritorial use of national core technologies.
27 April 2026: Court issues prison terms, fines, and orders compensation to TSMC.
Post-verdict: Tokyo Electron announces settlement and plans to tighten information-management controls.
Data & Statistics
Prison terms: 10 years (Chen Li-ming), 2–6 years (three other engineers), 10-month suspended (Lu Yi-yin). Fine: NT$150 million for Tokyo Electron Taiwan (NT$100 million to TSMC, NT$50 million to treasury). Technology: TSMC’s 2-nm process and related sub-14 nm data. Market reaction: TSMC shares rose 3.7 % after the ruling.
Why It Matters
The case shows Taiwan’s willingness to use national-security law to protect its semiconductor edge, a sector serving Apple, Nvidia, Google and others, and warns suppliers that theft of advanced process data will incur severe penalties.
Official Statements & Responses
Tokyo Electron said it regards the court’s finding with the utmost seriousness and will strengthen its information-management systems, asserting no organisational involvement. TSMC said it maintains a zero-tolerance stance on any actions that compromise trade-secret protection or damage its interests and will tighten internal controls. The court noted images of stolen data on Tokyo Electron’s cloud platform, confirming a supervisory breach.
Conflicting Reports & Gaps
Tokyo Electron’s statements assert no evidence of external leakage or corporate misconduct, while the court’s judgment cites TSMC data on the company’s cloud system and holds the subsidiary liable under the National Security Act. The settlement terms remain sealed, leaving remedial actions undisclosed.
Verbatim Quotes
- “We take the court’s finding with the utmost seriousness,” — Tokyo Electron spokesperson
- “information management systems and other relevant measures.” — 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
- “The court directed NT$100 million of this sum be paid directly to TSMC, while the remaining NT$50 million will go to Taiwan’s state treasury.” — Court order (as reported)
