[Taiwan Chip Dispatch] TSMC Launches 'Security All-Out War' Over Technology Leak Allegations... Tokyo Electron Excluded from Outstanding Partners for the First Time

Internal Crackdown Amid 2nm Technology Leak Allegations
Nine Taiwanese Firms Included Instead of TEL
at 2025 Local Supply Chain Management Forum

As competitors intensify their technological pursuit and the foundry (semiconductor contract manufacturing) race surrounding the 2-nanometer (nm; 1 nm is one-billionth of a meter) process heats up, TSMC, the world’s leading semiconductor manufacturer based in Taiwan, is actively tightening internal controls to prevent technology leaks.

According to Taiwan Economic Daily News on November 30, TSMC held the "2025 Supply Chain Management Forum" locally on November 26. At this forum, the company announced 30 outstanding partner firms, but for the first time, excluded Tokyo Electron (TEL, Japan), which had been included every year.

Local foreign media report that this move is interpreted as a stern measure, as suspicions of a "technology leak" that surfaced in August have not been fully resolved. Tokyo Electron is suspected of having illicitly obtained TSMC’s 2-nanometer process technology. Taiwanese prosecutors have found that three current and former TSMC engineers accessed the company’s internal network, photographed about 1,000 blueprints related to the 2-nanometer process, and handed them over to Tokyo Electron. The authorities determined that there was sufficient evidence of wrongdoing and indicted the three individuals on charges including violation of the National Security Act. Recently, prosecutors have sought a 14-year prison sentence for the accused, and a verdict is pending. Under Taiwan’s National Security Act, the maximum sentence for these charges is 12 years in prison and a fine of 100 million New Taiwan dollars (approximately 4.6 billion KRW). Since the Taiwanese authorities have classified this case as a national security issue rather than a mere case of corporate technology leakage, local analysts believe that the maximum sentence is likely to be imposed.

Instead of Tokyo Electron, TSMC included nine local Taiwanese companies among its 30 outstanding partners, the highest number of local firms ever selected. This is interpreted as a move to further strengthen its supply chain within Taiwan. There is also speculation that this may be an attempt to fundamentally block technology leaks overseas. Hou Yongqing, TSMC’s Co-Chief Operating Officer, who attended the forum, stated, "I would like to thank all our partners who have helped TSMC continuously present innovation to global customers with leading technology and excellent manufacturing services, even amid serious challenges," adding, "Through close cooperation, we will remain prepared, agile, and united to further reinforce our supply chain."

In addition, TSMC is responding strongly to technology leak risks, as evidenced by its recent lawsuit against a former executive who left the company for Intel. According to local media in Taiwan and the United States, TSMC has filed lawsuits in the Taiwan Intellectual Property Court and the Commercial Court against Luo Weijian, former Senior Vice President who moved to Intel, for violations of the Trade Secrets Act, breach of employment conditions, and breach of confidentiality and non-compete agreements. Luo had announced upon leaving TSMC in July that he would pursue an academic career, but last month he suddenly joined Intel as Executive Vice President (EVP). TSMC is reportedly deeply concerned that critical technologies and confidential information may be leaked through Luo and has taken legal action. Luo, who worked at Intel for 18 years as an executive in technology development before joining TSMC in 2004, participated in the development of advanced processes below 5 nanometers. In March last year, he was promoted to Senior Vice President of Corporate Strategy, managing relationships with TSMC’s client companies, and is regarded as someone with in-depth knowledge of TSMC’s internal information.

Taiwan Economic Daily News = Reporter Yoon Hyejung, translation by The Asia Business Daily

※This column is published as part of a strategic partnership between The Asia Business Daily and Taiwan Economic Daily News.