TSMC cracks down on potential trade secret breach, initiates legal action

[TAIPEI] Taiwan Semiconductor Manufacturing Company (TSMC), the world’s main producer of advanced AI chips, has launched legal proceedings and taken disciplinary action against employees involved in potential trade secret leaks after detecting unauthorised activities during routine monitoring.

TSMC in an emailed statement to Reuters said on Tuesday (Aug 5) that its “comprehensive and robust monitoring mechanisms” enabled early identification of the issue, leading to swift internal investigations and strict measures against the personnel involved.

The case, now under judicial review, prevents the company from providing further details, TSMC said.

Nikkei Asia earlier reported that the breach involved several former employees suspected of attempting to obtain critical proprietary information on TSMC’s two-nanometre chip technology.

It remains unclear what the former employees intended to do with the information or whether it was leaked to external parties, with investigations ongoing to determine the scope of the leak, and whether additional parties were involved in the matter, the Nikkei report said.

TSMC’s two-nanometre chip technology is the most advanced technology in the semiconductor industry in terms of both density and energy efficiency, according to the company’s website.

The contract manufacturer, which counts AI industry darling Nvidia, iphone maker Apple, and Qualcomm among its customers, highlighted its zero-tolerance policy for trade secret violations, and said it would pursue offenders to the full extent of the law.

TSMC’s recently secured a 300,000 H20 chipset contract from Nvidia. REUTERS