Taiwan Probes Tokyo Electron and Intel in TSMC Trade Secrets Investigations Amid US Tensions

• Taiwan’s prosecutors charged Tokyo Electron’s local subsidiary for not stopping alleged technology theft linked to TSMC, marking a rare action against a key ally.

• Investigators raided homes of a former TSMC executive now at Intel over fears of sharing national core critical technology.

• These cases coincide with U.S. political uncertainties, including statements from Donald Trump, heightening Taiwan’s vigilance on technology protection amid 20% U.S. tariffs and defense dependencies.

Taiwan trade secrets investigations in chip sector target Tokyo Electron and Intel, shielding TSMC’s innovations from leaks. Discover the implications for global supply chains and national security. Stay informed on these pivotal developments.

What Are Taiwan’s Trade Secrets Investigations in the Chip Sector?

Taiwan trade secrets investigations in the chip sector involve probes into potential theft of critical technology, primarily targeting partners like Tokyo Electron and Intel rather than traditional adversaries like China. Launched under 2022 national security rules, these investigations focus on preventing leaks of “national core critical technology” essential to Taiwan’s semiconductor dominance. Prosecutors have charged Tokyo Electron’s local arm for failing to curb alleged theft tied to TSMC, while searching properties linked to a former TSMC executive who joined Intel, amid concerns over non-compete violations and unauthorized disclosures.

How Do These Probes Relate to TSMC Technology Theft Concerns?

Taiwan’s chip industry, led by TSMC, produces the world’s most advanced semiconductors for applications in data centers, AI, and consumer electronics. The investigations stem from TSMC’s lawsuit against former executive Lo Wei-jen, who left in July to join Intel, alleging he might transfer trade secrets. Supporting data from industry reports indicates that such leaks could erode Taiwan’s 60% global market share in foundry services. Expert Jeremy Chang from Taiwan’s tech ministry institute emphasizes that companies must enhance compliance to avoid penalties, noting the charges against Tokyo Electron highlight supplier responsibilities in preventing theft. Short sentences underscore the urgency: These cases build on years of talent poaching, like the 2017 departure of engineer Liang Mong-song to SMIC, which narrowed technology gaps despite stricter laws.

Frequently Asked Questions

What triggered Taiwan’s trade secrets investigations targeting Tokyo Electron and Intel?

Taiwan’s investigations were prompted by TSMC’s complaints about potential technology leaks to these allies. Prosecutors charged Tokyo Electron’s subsidiary for inadequate safeguards against theft by former TSMC employees, while probing Lo Wei-jen’s move to Intel for possible disclosure of confidential information, all under 2022 national security statutes protecting core chip tech.

Why is Taiwan probing U.S. and Japanese firms amid China tensions?

In a natural conversational tone, Taiwan is expanding its defenses against all potential leaks, even from allies like Intel and Tokyo Electron, because global politics are unpredictable. With U.S. leaders like Donald Trump questioning Taiwan’s chip dominance and pushing for more American production, the island is safeguarding its economic edge through these investigations to maintain security against broader threats, including from China.

Key Takeaways

• Heightened Security Measures: Taiwan’s 2022 laws impose severe penalties for leaking national core critical technology, now applied to non-Chinese entities to broaden protection.
• Geopolitical Implications: Probes coincide with U.S. pressures, such as Trump’s comments on Taiwan “stealing” business, complicating alliances while TSMC ramps up $165 billion in U.S. investments.
• Compliance Imperative: Companies like Tokyo Electron must strengthen internal controls, as seen in charges for failing to prevent theft, setting precedents for global suppliers.

Conclusion

Taiwan’s trade secrets investigations in the chip sector, including probes into Tokyo Electron and Intel, underscore the island’s commitment to safeguarding TSMC technology theft concerns amid evolving U.S.-China dynamics. By enforcing national security rules, Taiwan aims to preserve its pivotal role in global semiconductor supply chains, where it holds over 90% of advanced chip production. As political tensions persist, these actions signal a proactive stance; industry leaders should prioritize robust compliance programs to navigate this landscape and ensure long-term innovation security. For ongoing updates on semiconductor developments, explore related insights on en.coinotag.com.

Taiwan has launched trade secrets investigations inside its chip sector under its wider national security rules, surprising many due to the unexpected targets. Rather than focusing solely on Chinese entities, the probes have zeroed in on Tokyo Electron and Intel, longstanding partners in the industry.

This development raises critical questions about Taiwan’s willingness to protect its semiconductor technology fiercely, especially as international relations continue to fluctuate unpredictably.

Last week, prosecutors formally charged the local operations of Tokyo Electron with neglecting to prevent alleged technology theft connected directly to TSMC, the island’s flagship chipmaker.

Just prior, authorities conducted searches at two residences associated with Lo Wei-jen, a high-profile ex-TSMC executive who departed the firm in July and subsequently took a role at Intel. The actions were justified by suspicions that Lo could have disseminated “national core critical technology” to his new employer.

In parallel, TSMC had initiated legal proceedings against Lo for violating his non-compete agreement, expressing firm beliefs that he posed a significant risk of “using, leaking, disclosing, delivering, or transferring” the company’s proprietary secrets and confidential data to Intel.

Legal experts and sector insiders in Taiwan have expressed approval that officials are addressing these vulnerabilities head-on, given TSMC’s indispensable position in the world economy.

As the leading contract chip manufacturer globally, TSMC supplies cutting-edge semiconductors that power everything from massive data centers to sophisticated AI infrastructure, underscoring Taiwan’s economic leverage.

The twist lies in the origins of these inquiries. While China has historically been viewed as the primary culprit in industrial espionage within the sector, the initial actions spotlight Tokyo Electron, a vital equipment provider, and Intel, a major customer and rival to TSMC.

Observers in Taipei link the timing to apprehensions regarding the reliability of Taiwan’s primary protector, the United States. Tensions escalated following Donald Trump’s remarks about negotiating a pact with China and accusing Taiwan of siphoning American chip manufacturing while relying on U.S. military aid.

A Taiwanese executive in the U.S. chip space described the scenario as a classic “man bites dog” reversal, since the scrutinized firms defy conventional threat narratives. Such moves might strain Taiwan’s diplomatic relationships, a risk it can ill afford amid needs for U.S. backing against Chinese influence under Xi Jinping.

Earlier this year, TSMC responded to pressures from the Trump administration by elevating its U.S. investment commitment from $65 billion to $165 billion. Despite this, American policymakers demand that 50% of global chip output occur domestically, a target exceeding TSMC’s feasible contributions.

In August, Washington acquired a 10% ownership in Intel to revitalize the ailing U.S. company as a strategic asset.

While no formal accusations have been leveled at Intel itself, with the focus remaining on Lo’s individual conduct, market analysts caution that escalating scrutiny could prompt U.S. intervention if it conflicts with national priorities.

James Chen, a professor at Tamkang University in Taipei, notes that Taiwan possesses “very limited options to refuse U.S. requests and pressure,” particularly as it seeks relief from Washington’s 20% tariffs on Taiwanese goods and bolsters support for President Lai Ching-te’s firm stance on China.

The foundational 2022 legislation empowers actions against leaks of “national core critical technology,” with an original intent to counter Chinese incursions.

For years, Taiwan has grappled with professionals defecting to mainland firms, exemplified by Liang Mong-song’s 2017 shift to SMIC, where he now serves as co-CEO; such migrations have aided SMIC in bridging technological divides with TSMC.

Although the statute levies harsher fines for disclosures to China compared to allies like Japan or the U.S., specialists argue it falls short in certain enforcement areas.

During her tenure, former President Tsai Ing-wen advocated for expansive governmental authority to launch investigations independently. Instead, lawmakers adopted a framework akin to the U.S. Economic Espionage Act, requiring complaints from Taiwanese entities to initiate proceedings.

Consequently, building airtight cases rests with prosecutors.

Regarding Tokyo Electron, charges against ex-TSMC staff for pilfering tech have been filed, but the corporate indictment centers on oversight lapses. Jeremy Chang highlights that this establishes a benchmark for mandatory enhanced compliance frameworks among firms.

Tokyo Electron maintains that the allegations do not implicate directives for theft and commits to refining its protocols. Intel asserts a strict policy against incorporating external technologies in its operations and dismisses the assertions about Lo as unfounded.

Stakeholders anticipate subtle political influences as Taipei maneuvers to sustain American allegiance.

Chen elaborates, “The government might entertain ideas of intervening or applying leverage, but they cannot directly interfere in the judicial system.” He further characterizes the situation as “very politicized and sensitive,” reflecting the intricate balance of economics, law, and international strategy.

These investigations not only fortify Taiwan’s defenses but also send ripples through the global chip ecosystem. As supply chain vulnerabilities come under renewed scrutiny, stakeholders worldwide must adapt to a landscape where even alliances are not immune to verification. Taiwan’s actions demonstrate a maturing approach to intellectual property protection, essential for maintaining its lead in an industry projected to exceed $1 trillion in value by 2030, according to data from the Semiconductor Industry Association.

Industry voices, including those from the Taiwan Semiconductor Industry Association, stress the need for collaborative efforts in compliance without compromising innovation. Quotes from experts like Chen illustrate the delicate tightrope: Protecting assets while fostering essential partnerships is paramount in this high-stakes arena.

Looking ahead, as U.S. investments in domestic production accelerate—bolstered by initiatives like the CHIPS Act—Taiwan’s probes could influence bilateral tech transfers and trade policies. This evolution ensures that Taiwan trade secrets investigations in the chip sector remain a cornerstone of its national strategy, blending legal rigor with diplomatic finesse.