Three former employees of TSMC detained, accused of smuggling secrets of 2nm

• By Jonathan Chin / Staff writer, with CNA

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Authorities have detained three former Taiwan Semiconductor Manufacturing Co (TMSC, 台積電) employees on suspicion of compromising classified technology used in making 2-nanometer chips, the Taiwan High Prosecutors’ Office said yesterday.

Prosecutors are holding a former TSMC engineer surnamed Chen (陳) and two recently sacked TSMC engineers, including one person surnamed Wu (吳) in detention with restricted communication, following an investigation launched on July 25, a statement said.

The announcement came a day after Nikkei Asia reported on the technology theft in an exclusive story, saying TSMC had fired two workers for contravening data rules on advanced chipmaking technology.

Two-nanometer wafers are the most advanced design and the tape-out process for making the first chips is scheduled to take place next month.

The office’s intellectual property branch launched a probe into the data breach after TSMC reported the incident to the authorities, it said.

The case is the first time Taiwan has invoked the National Security Act’s (國家安全法) provisions barring Taiwanese from leaking the nation’s core technology to foreign governments or commercial entities, the office said.

Article 3 of the act stipulates that core national technologies cannot be reproduced, utilized or disclosed without authorization, it said.

Law enforcement officials are working to determine the motive behind the alleged intellectual property theft and whether classified technology has been transferred to a third party, the office said.

Prosecutors did not announce whether the engineers were acting on behalf of a foreign government or company.

TSMC said that it has zero tolerance for any action that jeopardizes its operational secrets and that it would work with law enforcement to protect its competitive advantage.

Police and prosecutors have carried out a search of Tokyo Electron’s branch at the Hsinchu Science Park, which sources said could be related to the leak at TSMC.

The race to secure a leading role in the artificial intelligence era has made cutting-edge chips and memory a prized asset. Investment in chipmaking development is at an all-time high, as TSMC and its closest rival, Samsung Electronics Co, have set aside more than US$30 billion in annual capital expenditure, while US and Chinese companies are also eyeing developing the most advanced technology.

China’s progress has stalled several generations behind TSMC, with Huawei Technologies Co (華為) and Semiconductor Manufacturing International Corp (中芯) now fabricating silicon at 7-nanometers. In the US, Intel Corp is at a more advanced stage.

Additional reporting by Wu Sheng-ju and Bloomberg