Tokyo Electron’s Taiwan unit has been accused of violating Taiwan’s National Security Act and Trade Secrets Act. Prosecutors are asking that Tokyo Electron be fined several million dollars for its alleged role in the theft of TSMC’s trade secrets.
Taiwanese prosecutors have filed criminal charges against the Taiwan unit of Tokyo Electron (TEL), the Japanese chip equipment supplier. The charges allege that the company had a role in the theft of trade secrets from Taiwan Semiconductor Manufacturing Co. (TSMC).
Tokyo Electron’s Taiwan Unit Faces Legal Scrutiny
The charges against the department were announced on Tuesday, December 2, 2025, and are being pursued under both Taiwan’s Trade Secrets Act and the National Security Act.
This case marks the first instance where a corporation in Taiwan will be indicted under the National Security Act for the alleged theft of “national core critical technology trade secrets.”
Prosecutors are seeking a fine of up to NT$120 million (around $3.8 million) against the Tokyo Electron unit if it is convicted.
The main accusation is that the company allegedly failed to prevent the crime. Prosecutors pointed out that despite Tokyo Electron having internal rules, the unit “lacked evidence of concrete preventive or managerial measures” to stop the theft. Therefore, they argue the company must face corporate criminal liability.
In August 2025, a former TSMC employee, identified by the surname Chen, who later worked for the Tokyo Electron Taiwan unit, along with two current TSMC engineers, were indicted. Chen is accused of leveraging his connections to persuade his former colleagues to share confidential information about TSMC’s 2-nanometer (2nm) chip process technology.
The reported motivation for the theft was to assist Tokyo Electron in improving its etching equipment and to secure valuable contracts for TSMC’s most advanced manufacturing line.
Tokyo Electron has stated that it is cooperating with the investigation and has previously denied any organizational involvement in the alleged theft, asserting that the company does not tolerate staff misconduct.
TSMC's Recent Legal Engagements
TSMC has recently taken measures to safeguard its intellectual property. This includes filing a lawsuit against its former senior vice president, Wei-Jen Lo, who retired in July 2025 and subsequently joined rival company Intel Corp. as an executive vice president.
TSMC’s lawsuit, filed in November, alleges a “high probability” that Lo will “use, leak, disclose, deliver, or transfer TSMC’s trade secrets and confidential information to Intel,” thereby violating his non-compete agreement and the Trade Secrets Act.
Lo had initially stated his intention to join an “academic institution” upon his departure, a claim that has since been proven false.
Taiwanese prosecutors have initiated a criminal investigation into Lo’s case. They have seized computers and other digital evidence from his residences and suggest he is suspected of violating the National Security Act.
Intel’s CEO, Lip-Bu Tan, dismissed the allegations as speculation, stating that Intel “respects intellectual property rights” and maintains strict policies to prevent the use of third-party confidential information.