Ex-TSMC manager first to be indicted under National Security Act for allegedly attempting to leak core Taiwanese chipmaking technologies to China

Taiwanese prosecutors have reportedly indicted a former TSMC manager for allegedly stealing trade secrets to give to China. This case, according to a spokesperson from Taiwan's High Prosecutors Office who relayed the information to Nikkei Asia, is the first of its kind:

"Although the attempt to transfer the technology to China was unsuccessful, the case remains highly significant as the first prosecution under the National Security Act involving an alleged attempt to leak Taiwan's national core technologies to China."

The plan was, says Nikkei Asia, "to establish a semiconductor materials analysis company in China called CSMAC." Apparently, the prosecutors discovered that Chen, a former TSMC deputy manager, worked with another Hong Kong man to steal TSMC trade secrets, copying 21 confidential documents, taking them home to study for use in China. The prosecutors also claim that Chen was considering recruiting more talent from Taiwan for CSMAC.

Chen has been detained for the past couple of months, and could face up to seven years in prison. TSMC, on the other hand, is apparently doing fine, as it has recovered all the documents.

This time last year I reported that the Taiwanese chip industry is becoming a hot target for Chinese state-sponsored hackers trying to steal trade secrets. And regarding TSMC specifically, we've already seen several employees fired and Taiwanese prosecutors getting involved.

China is, of course, the biggest threat to the Taiwanese chip industry right now. And as of late, the competitor nation has been doing incredibly well, with memory maker CXMT doing incredibly well when it comes to DRAM production. TSMC makes high-performance logic, however, and we haven't seen anything from China on the processor-making front that's likely to threaten TSMC just yet.

That being said, taking IP and trade secrets from TSMC could change that. It is the world's biggest and most advanced chipmaker, after all.