TSMC Takes Legal Action Against Former Executive Over Security Issues
Taiwan Semiconductor Manufacturing Company (TSMC) has filed a lawsuit against one of its former top executives, Wei‑Jen Lo, over serious security concerns. The company alleges that Lo may have misused or shared its most sensitive trade secrets after leaving TSMC and joining Intel.
Why This Case Matters
TSMC is not just any chipmaker: it is the world’s leading contract semiconductor foundry. It produces highly advanced chips for big tech players. Losing control of its intellectual property could weaken its competitive edge. We must understand what’s at stake, not just for TSMC, but for the global tech industry.
How It Started: What Led to Legal Action
According to TSMC’s statement, the lawsuit is based on several legal grounds: Lo’s employment contract, a non-compete agreement, and Taiwan’s Trade Secrets Act. TSMC says there is a “high probability” that Lo used, leaked, or transferred confidential information to Intel. Lo had a long 21-year career at TSMC, where he played a major role in advancing its 5 nm, 3 nm, and even 2 nm chip processes. He retired in July 2025 but resurfaced quickly at Intel, raising red flags inside TSMC.
What TSMC Is Worried About: The Security Threat
TSMC claims that Lo might have taken confidential documents on its most sensitive technologies, specifically processes for 2-nanometer, A14, and A16 chips. Local media reported that before leaving, Lo asked to be briefed by his team and then carried out “more than 80 boxes of data and books.” These are not small engineering notes; they could include designs, manufacturing steps, or other trade secrets that took years to develop. If that information falls into the wrong hands, it could give competitors a shortcut.
More Trouble: Other Leak Investigations
This is not the first time TSMC has faced serious security issues. Earlier in 2025, the company reported unauthorized access to trade secrets related to its 2 nm technology during routine monitoring. As a result, three people were arrested by Taiwan’s prosecutors. Prosecutors say the leaked materials could have been used by a Japanese company, Tokyo Electron, to improve its etching machines. These machines are critical for making advanced chips, so this leakage is more than just internal theft. It has global implications for the chip supply chain.
How TSMC Is Handling It
TSMC says its internal security tools are strong. In its statement, the company highlighted that its monitoring system detected the suspicious activity early. Once it flagged the issue, TSMC launched investigations and took swift legal action. By suing Lo and cooperating with prosecutors, TSMC aims to send a strong message: leaking trade secrets will not be tolerated. It is protecting both its technology and reputation.
Why This Case Matters Globally
This legal battle shows how fragile and high-stakes intellectual property (IP) is in the semiconductor world. TSMC’s chip processes are not just business secrets; they are strategic assets that shape the future of AI, smartphones, and data centers. If insiders can take such data, it can weaken a company’s edge. For governments, it’s also a national-security issue. Taiwan, especially, treats advanced chip technology as a core part of its industrial strength.
What It Means for Innovation and Competition
We live in a world where innovation often depends on collaboration. But TSMC’s case reminds us that collaboration and security must coexist. Companies need to protect their IP, even while hiring top talent. Non-compete agreements, trade-secret laws, and ethical standards are more vital than ever. We also see that talent mobility, top engineers switching companies, can pose real risks when not managed with care. For the chip industry to move forward, firms will need to balance open innovation with strict security.
What Happens Next
Right now, the legal case is in Taiwan’s Intellectual Property and Commercial Court. At the same time, prosecutors are investigating whether Lo violated Taiwan’s National Security Act by potentially giving “core key technologies” to a foreign firm. If TSMC wins, it could recover damages and set a strong precedent about protecting trade secrets. Even if the case becomes public and messy, it may push TSMC to further tighten its internal security.
On the other hand, Intel and other companies must be careful: hiring high-level talent is one thing; making sure that talent does not bring proprietary secrets along is another.
Conclusion
TSMC’s legal action against its former executive is not just a corporate dispute. It is a signal to the whole semiconductor world. The company is warning that its most advanced chip technologies cannot be taken lightly. We see this as more than a fight between TSMC and Intel. It is a moment that highlights how vital trade secret protection is in a world where chips power almost everything, from self-driving cars to cloud servers. By standing firm, TSMC makes its case: securing its technology now is not just good business, it’s critical for staying on top in a global, high-stakes race.
Disclaimer:
The content shared by Meyka AI PTY LTD is solely for research and informational purposes. Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.
