Taiwan court sentences ex-Tokyo Electron staff to 10 years in TSMC trade secrets case

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NEW TAIPEI CITY, Taiwan (AP) — A court in Taiwan sentenced a former employee of Japanese computer chip equipment maker Tokyo Electron to 10 years in prison on Monday in a landmark case over trade secrets of the island’s leading chipmaker TSMC.

Tokyo Electron was also fined 150 million new Taiwan dollars ($4.8 million) and four other people were sentenced to up to six years in jail.

The heavy sentencing under Taiwan’s national security act and other statutes underscores Taiwan's efforts to protect the self-ruled island’s advanced technology and semiconductor sector, which are vital for its export-oriented economy as artificial intelligence booms.

TSMC, or Taiwan Semiconductor Manufacturing Corp., is one of the world’s most valuable companies and counts Nvidia and Apple as key customers.

In handing down the 10-year sentence at Taiwan’s Intellectual Property and Commercial Court, Judge Chang Ming-huang said Chen Li-ming, who worked at TSMC before moving to Tokyo Electron's subsidiary in Taiwan, was believed to have used his relationships with his former TSMC colleagues to illegally access and collect the chip maker's trade secrets.

Chen photographed, copied and passed along the materials to help Tokyo-based Tokyo Electron improve its bids as a TSMC supplier, according to the court.

Chen's motivation was mainly to “improve his personal work performance,” Chang said, but he jeopardized the competitiveness and economic security of Taiwan and its chipmaking industry.

Taiwan’s prosecutors indicted Chen and others in August on alleged trade secret theft. Tokyo Electron said in a statement at the time it had dismissed an employee involved in the case but also said its internal investigation had not confirmed evidence of the relevant confidential information being leaked.

The Japanese company said Monday that it takes “the court’s finding with the utmost seriousness” and will strengthen its "information management systems and other relevant measures.” But it stressed that the court and its own probe had not found any organizational involvement by Tokyo Electron.

TSMC said in a response that it “maintains a zero-tolerance policy toward any actions that compromise the protection of trade secrets or harm the company’s interests” and that such kinds of violations “are dealt with strictly and pursued to the full extent of the law.”

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Chan reported from Hong Kong.