Taiwan jails ex-TSMC engineer in trade secrets case

TAIPEI, Taiwan: A Taiwan court sentenced a former employee of chipmaking giant TSMC to 10 years in prison on Monday for stealing trade secrets to benefit his later workplace, the local subsidiary of Tokyo Electron.

TSMC is the world’s largest contract semiconductor chip manufacturer and makes cutting-edge chips for Nvidia and Apple.

Chen Li-ming, an engineer who joined the Japanese company after leaving TSMC, was convicted of using his ties with former colleagues to help Tokyo Electron — already a major supplier of chipmaking equipment for the Taiwanese giant — compete for more contracts.

Taiwan’s Intellectual Property and Commercial Court found Chen had obtained trade secrets “in pursuit of his personal job performance”, sentencing him to 10 years behind bars for violations of the National Security Act and the Trade Secrets Act.

His actions created “risks to TSMC’s trade secrets and Taiwan’s economic security”, the court said in a statement.

Three people who worked for TSMC at the time also received sentences in the case, ranging from two to six years.

Tokyo Electron’s Taiwan entity was ordered to pay TSMC NT$100 million ($3.2 million) and fined another NT$50 million.

The court said Tokyo Electron had “failed to properly fulfil its corporate social responsibility in supervising its employees”.

The company previously said it had sacked Chen.

A Tokyo Electron employee, convicted of destroying evidence after deleting image files copied by Chen, received a 10-month suspended term, the court said.

Tokyo Electron Taiwan and TSMC did not immediately comment on the verdict when contacted by AFP.

During the investigation, TSMC said in a statement that Tokyo Electron Taiwan was not a competitor, and that the trade secrets obtained by Chen were not disclosed to any third party.