TLDR
- A Taiwanese court sentenced former TSMC engineer Chen Li-ming to 10 years in prison for stealing chip trade secrets
- Three other engineers received sentences of two to six years each
- Tokyo Electron’s Taiwan branch was fined NT$150 million (about $4.8 million USD)
- This is the first case in Taiwan using national security law to prosecute critical chip technology theft
- TSMC’s internal security systems detected the irregular data access last July, triggering the investigation
Taiwan’s Intellectual Property and Commercial Court handed down a 10-year prison sentence on Monday to a former engineer who stole trade secrets from chipmaker Taiwan Semiconductor Manufacturing.
A Taiwanese court has sentenced a former Tokyo Electron employee to 10 years in prison for stealing TSMC's proprietary data, highlighting the growing threat of industrial espionage in the island’s most strategic sector https://t.co/pvriugp64j
— Bloomberg (@business) April 27, 2026
Chen Li-ming previously worked at TSMC before moving to Tokyo Electron’s Taiwan subsidiary. He used his connections with former TSMC colleagues to access, photograph, copy, and pass along confidential files.
The stolen materials were used to help Tokyo Electron upgrade its technology and improve its bids as a TSMC supplier.
Three other engineers who were still employed at TSMC at the time also received sentences. Their terms ranged from two to six years.
A Tokyo Electron manager was convicted separately for ordering the deletion of confidential TSMC files. That manager received a 10-month sentence, suspended for three years.
This is the first time Taiwan has applied national security legislation to a case involving the theft of critical chip technology. Officials say corporate theft of sensitive information has surged over the past decade.
Court Fines Tokyo Electron and Orders Payout to TSMC
Tokyo Electron’s Taiwan branch was fined NT$150 million, roughly $4.8 million USD. The court ordered NT$100 million of that amount paid directly to TSMC, with the remaining NT$50 million going to the state treasury.
The company itself was indicted as a corporate entity in the case.
Tokyo Electron said it takes the ruling seriously and will continue strengthening its information management. The company said neither investigators nor the court found any organizational wrongdoing or leakage of confidential data on its part.
Tokyo Electron added it does not expect the ruling to have any financial impact on its business.
How TSMC Caught the Theft
TSMC’s internal security systems detected irregular access to confidential data last July, which triggered the investigation.
A court official confirmed that based on information provided by TSMC, Tokyo Electron did not actually leak any of the stolen materials externally. The specific settlement terms between both companies remain confidential.
The court noted that Tokyo Electron failed to properly supervise Chen. Internal performance evaluations had flagged his ability to “leverage existing client resources” and obtain customer and competitor information.
TSMC manufactures chips for major companies including Apple and Nvidia. The company has stated it will continue taking action against trade-secret theft to protect its competitive advantage.
Tokyo Electron said it cooperated with authorities throughout the investigation.
All defendants, including Tokyo Electron’s Taiwan branch, have the right to appeal the ruling.
Shares of both companies were little moved following the verdict.
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