Taiwan prosecutors indicted a former TSMC deputy manager for attempting to steal national core technology secrets and transfer them to China's semiconductor industry, marking the first case where the National Security Act has been applied to technology transfer attempts. According to Nikkei Asia on the 20th, a Taiwan prosecutor spokesperson stated that while the attempt to transfer technology to China ultimately failed, the case holds significant importance as it represents the first prosecution under the National Security Act for attempting to leak Taiwan's national core technology to China. Prosecutors are seeking a maximum seven-year prison sentence for the defendant. The case emerged during a separate investigation into Chinese espionage activities, revealing that former TSMC employee Chen conspired with Hong Kong national Ding, who was under investigation in another espionage case, to steal TSMC's trade secrets. Chen has been detained since late May, while Ding died early this year.
Prosecutors Uncover Technology Theft During Espionage Investigation
The prosecutor spokesperson explained that the case came to light during an investigation into separate Chinese espionage allegations. During the investigation, prosecutors discovered that Chen, a former TSMC employee, conspired with Ding, a Hong Kong national under investigation in another espionage case, to steal TSMC's trade secrets. Chen has been held in custody since late May, while Ding died early this year.
Chen and Ding Established CSMAC and Copied 21 TSMC Documents
According to prosecutors, from May 2023 to February 2024, Chen and Ding established a semiconductor materials analysis company called CSMAC in China. Chen created multiple business plans, including the so-called 'Blue Ocean Plan,' which aimed to recruit talent from Taiwan's semiconductor industry to CSMAC in China. Chen is accused of unauthorized copying of 21 TSMC confidential documents containing national core technologies and other trade secrets. Prosecutors allege that he intended to take these documents to China for research and utilize them there.
TSMC Discovered Unauthorized Copying Through Internal Monitoring
Prosecutors reported that TSMC subsequently discovered the unauthorized activity through its internal monitoring system and conducted its own investigation, recovering all the unlawfully copied technical documents.
National Security Act Protects Semiconductor Technologies Beyond 14nm
Taiwan's National Security Act, implemented in 2022, was established to protect Taiwan's most sensitive technologies, particularly in the semiconductor sector, from foreign threats. The law designates national core technologies, including chip technologies more advanced than 14 nanometers (nm), as protected subjects. It stipulates criminal penalties for unauthorized copying, use, or disclosure of related trade secrets.
FAQ
What did Taiwan prosecutors charge the former TSMC manager with?
Taiwan prosecutors indicted a former TSMC deputy manager for attempting to steal national core technology secrets and transfer them to China's semiconductor industry. The defendant is accused of conspiring with a Hong Kong national to establish a semiconductor materials analysis company called CSMAC in China and unauthorized copying of 21 TSMC confidential documents containing national core technologies and trade secrets from May 2023 to February 2024.
Why is this case significant under Taiwan's National Security Act?
According to a Taiwan prosecutor spokesperson, this case represents the first prosecution under the National Security Act for attempting to leak Taiwan's national core technology to China. Taiwan's National Security Act, implemented in 2022, protects the country's most sensitive technologies, particularly chip technologies more advanced than 14 nanometers, and stipulates criminal penalties for unauthorized copying, use, or disclosure of related trade secrets. Prosecutors are seeking a maximum seven-year prison sentence for the defendant.
