Three people, including a pair of former employees of TSMC, were arrested for allegedly stealing proprietary technology from Apple’s chip partner, Taiwanese prosecutors have confirmed.
Industrial espionage can be lucrative but a very high-stakes crime for those involved. In the case of three people in Taiwan, they have been arrested for allegedly taking secrets from Taiwan Semiconductor Manufacturing Company, TSMC.
TSMC alerted prosecutors to the activity after internal monitoring discovered “potential trade secret leaks,” reports the Financial Times.
The suspects arrested in the investigation consist of three people. One was a former TSMC engineer, while a second was still employed by the chip maker, before being fired once the activity came to light.
The investigation led to a search of the facilities of Japanese chip tool producer Tokyo Electron. Several suspects have also been questioned by the Taiwan High Prosecutors Office’s intellectual property branch in late July, with some residences and workplaces also searched by police.
Prosecutors say the trio were arrested on “serious suspicions of violating national security laws.” However, they also declined to say why a search of Tokyo Electron was carried out.
The arrests are not the only significant action that has occurred as part of the investigation. Nikkei reported on Tuesday that several TSMC employees were fired for attempting to get information on the company’s 2-nanometer production processes.
Apple, a key client of TSMC for its A-series and M-series chips, is expected to be among the first to benefit from 2-nanometer chip production, which could start later in 2025.
TSMC confirmed that it had detected and raised the issue through its monitoring systems. Like the prosecutors, TSMC held back from revealing further details instead of compromising the ongoing active investigation.
National chip security
The investigation is the first to be carried out under Taiwan’s national security law after provisions were added three years ago to protect some important technologies. Evidently, that also includes protecting TSMC, the country’s jewel in its technology crown.
With TSMC producing more than 90% of the world’s advanced chips, the government has wanted to protect the organization from harm.
The law changes were brought in following cases where Chinese companies poached engineers from Taiwanese firms to boost their own chip production efforts.
TSMC’s protection of its chip line in the face of Chinese pressure has led to it taking measures just in case the worst happens. In May 2024, it was revealed that it had the capability to wreck expensive chip production machinery remotely, destroying hundreds of millions of dollars worth of machinery to prevent it from falling into Chinese hands during an invasion.
