TSMC Espionage: Engineers Passed on 2-nm Secrets

Security of Key Technologies TSMC Espionage: How Engineers Passed on 2-nm Secrets

2025-09-01 From Susanne Braun | Translated by AI 2 min Reading Time

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In July 2025, TSMC uncovered a case of industrial espionage and reported it to the public prosecutor's office. Three active and one former employee are alleged to have passed on confidential documents classified as national core technology, containing information about TSMC's 2-nm processes. They face imprisonment.

The 12-inch wafer fabs, including Fab 12 (pictured), are the backbone of TSMC's advanced production and support nodes as small as 3 nm and below, which are significant for high-performance computing and AI applications.(Image: TSMC) — The 12-inch wafer fabs, including Fab 12 (pictured), are the backbone of TSMC's advanced production and support nodes as small as 3 nm and below, which are significant for high-performance computing and AI applications.
(Image: TSMC)

Taiwan Semiconductor Manufacturing Company (TSMC) is one of the most advanced manufacturers of semiconductors, and competitors are accordingly eager for information about the foundry giant's processes—especially regarding the 2-nm processes, which are set to enter mass production later this year. On July 8, 2025, TSMC filed a report with Taiwan's Supreme Prosecutor's Office after internal investigations confirmed a data leak.

Since the case involved core technologies that are crucial to Taiwan's industrial lifeline and pose a serious threat to the international competitiveness of the semiconductor industry, the crimes of the accused were classified as particularly severe. But what exactly happened?

Industrial espionage for business advantages

Three TSMC engineers with the surnames Wu, Ge, and Liao were arrested following the report. During interrogations, the prosecutors' charges were confirmed: violations of the National Security Act concerning the unauthorized use of national key technologies, as well as a case of trade secret theft, reports Economic Daily News (via Trendforce). The engineers face prison sentences ranging from 7 to 14 years.

In fact, the following is said to have occurred: A former TSMC yield engineer from Fab 12 with the surname Chen reportedly maintained contact with Wu, Ge, and Liao after changing jobs to Tokyo Electron. "Mr. Chen was well aware of the various measures for protecting confidential information at TSMC and knew precisely how strictly TSMC enforces compliance with confidentiality agreements by its suppliers," reports Economic Daily News.

Nevertheless, he is said to have used his contacts to gain access to twelve pages of documents containing national key technology secrets. "Chen photographed and duplicated these materials so that Tokyo Electron could verify and improve the performance of its etching equipment, thereby securing qualification as a supplier of etching machines for TSMC's 2-nm mass production," it continues. Observers believe that Chen is particularly heavily implicated as the central figure. (sb)

TSMC employees in the new manufacturing facility in Arizona: The leading contract manufacturer for semiconductors has filed a series of lawsuits against former employees. The focus is primarily on the theft of industrial secrets regarding the in-house 2-nanometer manufacturing process. (Image:TSMC)

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