Asia-Pacific Tech and Security Update for August 6, 2025.
Taiwan authorities have made headlines globally after taking steps against multiple employees of Taiwan Semiconductor Manufacturing Company (TSMC), the world’s top chipmaker. Allegedly they stole sensitive trade secrets related to advanced chip fabrication technologies from TSMC.
On Tuesday, Hsinchu District Prosecutors Office confirmed a joint investigation between themselves and Ministry of Justice Investigation Bureau (MJIB) which resulted in arresting at least five individuals – current and former TSMC engineers- accused of illegally accessing and transferring proprietary information related to 2-nanometer (2nm) chip production process used by TSMC — considered among the world’s most advanced semiconductor technologies.
“These individuals are being investigated for violating Taiwan’s Trade Secrets Act by unlawfully reproducing, storing and exporting confidential R&D material to competitors without authorization,” according to an official statement from MJIB. Their actions pose a severe threat to Taiwan’s semiconductor industry as well as national security.
Initial reports indicate the suspects may have attempted to use stolen information for personal gain by cooperating with mainland Chinese semiconductor firms or third-party jurisdictions.
TSMC, which plays a critical role in global supply chains–producing chips for tech titans like Apple, Nvidia and Qualcomm–issued a statement affirming it is cooperating fully with authorities. “We take intellectual property protection very seriously and have robust internal security systems in place. We appreciate the authorities for taking swift action,” according to TSMC’s statement.
According to sources familiar with the case, internal audits and cybersecurity surveillance raised concern after irregular data access patterns were identified. Further monitoring led investigators to discover unauthorised transfers of technical documents to external cloud storage providers or encrypted messaging platforms.
Arrests come at a time of rising tension between Taiwan and China, particularly over technology and talent poaching. Taiwanese officials have long warned of Chinese firms’ efforts to poach engineers while simultaneously gathering sensitive semiconductor know-how as part of China’s chip self-sufficiency drive.
China’s ambitions in semiconductors are well known, as are their tactics,” according to Dr. Alan Lee of Taipei-based TechShield Research. According to him, cases like this demonstrate why Taiwan must strengthen industrial espionage protections and update legislation accordingly in order to remain globally competitive in next-generation technologies.
The incident has also raised serious concerns in Washington and Brussels as Western governments invest billions to secure semiconductor security against theft or supply chain disruption. On Tuesday, the U.S. Commerce Department released a brief statement emphasizing its trust in Taiwan as an “ideal partner in safeguarding global semiconductor innovation.”
Taiwan’s Ministry of Economic Affairs has pledged to review existing policies and strengthen penalties for trade secret violations that threaten national security or economic resilience, particularly within sectors deemed essential for national security or resilience.
Taiwan authorities have detained four suspects who could face up to 10 years in prison if found guilty under Taiwan’s Trade Secrets Act, yet have withheld their names due to the sensitive nature of their investigations.
Taiwan continues to assert itself as a global semiconductor hub, so the outcome of this case may serve as a marker for how Taiwan handles high-stakes technology protection in an increasingly contentious geopolitical climate.