Offenders sentenced up to 10 years for spying on TSMC

LEAKING TRADE SECRETS:
Chen Li-ming, who previously worked in a yield engineering unit at TSMC, joined Tokyo Electron Taiwan’s marketing division after leaving the chipmaker

A former Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) engineer has been sentenced to 10 years in prison for his role in leaking trade secrets involving the company’s advanced 2-nanometer process, a court ruled yesterday.

The Intellectual Property and Commercial Court found Chen Li-ming (陳力銘) guilty of contraventing the National Security Act (國家安全法), and of other offenses related to the unauthorized acquisition and the use of Taiwan’s “national core key technologies.”

The ruling can be appealed.

Photo: CNA

The case is the first involving a corporate entity under the National Security Act.

Two other TSMC engineers — Wu Ping-chun (吳秉駿) and Ko Yi-ping (戈一平) — were sentenced to three and two years in prison respectively, while another employee, Chen Wei-chieh (陳韋傑), received a six-year sentence.

A fourth defendant, Lu Yi-yin (盧怡尹), was given a 10-month suspended sentence and fined NT$1 million (US$31,779). She is an employee of Tokyo Electron Taiwan (東京威力), the company to which the TSMC trade secrets were leaked.

Photo: Ann Wang, Reuters

Tokyo Electron Taiwan, a TSMC equipment supplier, was fined NT$150 million, which could be suspended if it pays NT$100 million in compensation to TSMC and NT$50 million to the treasury, the ruling said.

Chen Li-ming, who previously worked in a yield engineering unit at TSMC’s Fab 12, joined Tokyo Electron Taiwan’s marketing division after leaving the chipmaker, prosecutors from the Intellectual Property Branch of the Taiwan High Prosecutors’ Office said.

Between the second half of 2023 and the first half of last year, Chen Li-ming repeatedly solicited confidential technical information from Wu and Ko, who were still employed at TSMC, in a bid to help Tokyo Electron secure more equipment supply positions for TSMC’s advanced process nodes.

Photo: Ann Wang, Reuters

The information, including trade secrets related to etching equipment used in 2-nanometer production, was photographed and reproduced to allow Tokyo Electron to evaluate and improve its equipment performance, prosecutors said.

TSMC reported the case to authorities on July 8 last year after detecting irregularities through an internal investigation, an earlier statement said.

Prosecutors conducted an investigation between July 25 and 28 last year, and obtained court approval to detain and hold Chen Li-ming, Wu and Ko incommunicado.

The three suspects were indicted in August last year on charges including theft of trade secrets and extraterritorial use of national core technologies. Prosecutors sought prison terms of 14 years, nine years and seven years for Chen Li-ming, Wu and Ko respectively.

Prosecutors later determined that Tokyo Electron Taiwan failed to exercise adequate supervision over Chen Li-ming and did not take sufficient measures to prevent breaches of the law, and pursued corporate criminal liability under the National Security Act, seeking a fine of NT$120 million against the company.

Investigators also found that the company’s cloud storage still contained TSMC’s trade secrets, including chip manufacturing technologies below the 14-nanometer node, and related equipment and chemical processes.

Tokyo Electron, Japan’s largest semiconductor equipment maker and TSMC’s major Japanese supplier, in a statement issued after the indictments last year said that it had found no evidence that TSMC’s 2-nanometer technology had been leaked to third parties, adding that it does not tolerate contraventions of the law or ethical standards.

TSMC has said it maintains a zero-tolerance policy toward trade secret violations and pledged to strengthen internal controls to safeguard its technological advantage.

Additional charges were filed in January against Chen Li-ming, Chen Wei-chieh, Tokyo Electron Taiwan and Lu, who was accused of destroying evidence.