Taipei: A former executive at Taiwan Semiconductor Manufacturing Co. (TSMC) has been indicted for allegedly attempting to leak TSMC's core technologies to China, prosecutors said Monday. The Taiwan High Prosecutors Office's Intellectual Property Prosecutors Office confirmed that the former deputy manager, surnamed Chen, has been charged with violating the National Security Act and the Trade Secrets Act. Prosecutors have recommended a seven-year prison sentence.
According to Focus Taiwan, the prosecutors explained that TSMC's technological leadership is crucial for Taiwan's economy and the global competitiveness of its semiconductor industry. Chen's alleged actions posed a threat to Taiwan's technological advantage. The case is linked to a separate investigation into an alleged Chinese espionage network in Taiwan, reportedly developed by Hong Kong national Ding Xiaohu.
Investigators revealed that Ding, under instructions from the Nanning station of the Chinese Communist Party's Central Military Commission Political Work Department, made multiple trips to Taiwan. During these visits, Ding aimed to recruit agents and gather intelligence on Taiwan's critical technologies and trade secrets. An intermediary named Huang allegedly assisted Ding in recruiting Chen, who was then a deputy manager at TSMC, the world's largest contract chipmaker.
Between May 2023 and February 2024, Chen and Ding allegedly planned to establish a semiconductor materials analysis company in China, named CSMAC. Prosecutors claimed that Chen drafted a "Blue Ocean Project" to recruit Taiwanese semiconductor talent to the company to help advance China's chip industry. Chen allegedly copied 21 classified and general trade-secret documents from TSMC without authorization and intended to use them in China.
TSMC identified these irregularities through an internal investigation and successfully recovered all copied documents before any technology was transferred. Authorities conducted searches at five locations on May 28, interrogated three suspects, including Chen, and one witness. Following the investigation, Chen was detained and held incommunicado by the Intellectual Property and Commercial Court. Meanwhile, Ding was not prosecuted due to his death.