TSMC Catches Employees Red-Handed in Trade Secret Leak

Taiwan's TSMC, the world's largest chipmaker, discovered potential trade secret leaks by its own employees and has launched legal proceedings against the personnel involved.

TSMC detected "unauthorized activities" that led to the discovery of potential trade secret theft, with the company taking "strict" disciplinary action against those involved. According to Nikkei Asia, several former employees are suspected of attempting to obtain critical proprietary information on 2-nanometer chip development while still working at the company.

The timing couldn't be more sensitive—2nm chips represent the bleeding edge of semiconductor manufacturing, and TSMC sits on a treasure trove of over 200,000 trade secrets in its internal system. The company emphasized its "zero-tolerance policy" and said it identified the issue early through "comprehensive and robust monitoring mechanisms."

TSMC shares rose 1.32% following the announcement, suggesting investors view the company's proactive detection as a positive sign of internal security. The disclosure demonstrates TSMC's ability to protect its crown jewels—the advanced manufacturing processes that keep Apple, Nvidia, and other tech giants coming back.

For semiconductor investors, this reinforces TSMC's moat. The company's ability to catch potential IP theft early shows the robustness of its security systems, crucial when you're manufacturing the world's most advanced chips.

This isn't TSMC's first rodeo with IP theft—in 2018, a former employee was indicted for copying 28nm trade secrets with intent to transfer them to a Chinese semiconductor company. The pattern reflects broader geopolitical tensions around chip technology, where manufacturing know-how has become a national security asset.

With AI driving unprecedented demand for advanced semiconductors, protecting manufacturing secrets has never been more critical. TSMC's dominance in cutting-edge chip production makes it a perpetual target, but this case shows the company is staying vigilant as the stakes continue rising.

Source: CNBC, "World's largest chipmaker TSMC says it has discovered potential trade secret leaks," August 5, 2025