Tokyo Electron becomes latest charged over TSMC trade secrets

Tokyo Electron’s Taiwan unit has been accused of violating Taiwan’s National Security Act and Trade Secrets Act. Prosecutors are asking that Tokyo Electron be fined several million dollars for its alleged role in the theft of TSMC’s trade secrets. 

Taiwanese prosecutors have filed criminal charges against the Taiwan unit of Tokyo Electron (TEL), the Japanese chip equipment supplier. The charges allege that the company had a role in the theft of trade secrets from Taiwan Semiconductor Manufacturing Co. (TSMC). 

Tokyo Electron’s Taiwan unit sees legal trouble

The charges against the department were announced on Tuesday, December 2, 2025, and are being pursued under both Taiwan’s Trade Secrets Act and the powerful National Security Act.

This case is the first in which a corporation in Taiwan will be indicted under the National Security Act for the alleged theft of “national core critical technology trade secrets.”

The prosecutors are seeking a fine of up to NT$120 million (around $3.8 million) against the Tokyo Electron unit if it is convicted. 

The main accusation is that the company allegedly failed to prevent the crime. Prosecutors pointed out that Tokyo Electron has internal rules, and still the unit “lacked evidence of concrete preventive or managerial measures” to stop the theft. Therefore, they argue the company must face corporate criminal liability.

In August 2025, a former TSMC employee, surname Chen, who later worked for the Tokyo Electron Taiwan unit, and two current TSMC engineers were indicted. Chen is accused of using his connections to convince his former colleagues to share confidential information about TSMC’s 2-nanometer (2nm) chip process technology. 

The motivation for the theft was reportedly to help Tokyo Electron improve its etching equipment and secure valuable contracts for TSMC’s most advanced manufacturing line.

Tokyo Electron has stated it is cooperating with the investigation and also previously denied any organizational involvement in the alleged theft, saying the company does not tolerate staff misconduct. 

TSMC’s legal battles  

TSMC has taken steps to protect its intellectual property recently, including filing a lawsuit against its former senior vice president, Wei-Jen Lo, who retired in July 2025 and joined the rival company Intel Corp. as an executive vice president. 

TSMC’s lawsuit, which was filed in November, alleges that there is a “high probability” that Lo will “use, leak, disclose, deliver, or transfer TSMC’s trade secrets and confidential information to Intel,” violating his non-compete agreement and the Trade Secrets Act.

Lo had stated he would join an “academic institution” upon departure, but that turned out to be false. 

Taiwanese prosecutors have opened a criminal investigation into Lo’s case, seizing computers and other digital evidence from his homes and suggesting he is suspected of violating the National Security Act. 

Intel’s CEO, Lip-Bu Tan, dismissed the allegations as speculation and stated that Intel “respects intellectual property rights” and has strict policies to prevent the use of third-party confidential information.

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