Taiwan court fines Tokyo Electron unit $4.7 million over TSMC data theft

TAIPEI (Kyodo) -- A Taiwanese court on Monday fined the local unit of Japan's Tokyo Electron Ltd. NT$150 million ($4.7 million) and sentenced a former employee to 10 years in prison over the theft of trade secrets from Taiwan Semiconductor Manufacturing Co.

The Intellectual Property and Commercial Court pointed out in its ruling that the case involving sensitive data of the world's largest contract chipmaker posed a threat to the international competitiveness of Taiwan's semiconductor industry as well as its economic security.

Chen Li-ming, a former TSMC and Tokyo Electron employee, was given a 10-year jail term, while three other former TSMC workers received punishments ranging from two to six years in prison. Another defendant was given a 10-month sentence, suspended for three years.

The ruling ordered Tokyo Electron to pay NT$100 million to TSMC and NT$50 million to the state treasury.

The court said most defendants had confessed and that their statements were consistent with the evidence. Chen acted in pursuit of work performance, creating a risk of TSMC trade secrets leakage.

The investigation found that the trade secrets collected by Chen were not disclosed to any third party other than Tokyo Electron's Taiwan unit and its parent company, the court said, adding that Chen "fully cooperated with and assisted the investigation," and that TSMC expressed willingness to accept his apology.

Last year, Taiwanese authorities indicted several individuals on suspicion of stealing TSMC's advanced 2-nanometer chip technology and leaking the information to the Tokyo Electron unit.

The case has since become a high-profile example of alleged breaches of national core technologies, with charges brought under the National Security Act.

Tokyo Electron said in a statement it took the court's ruling "with the utmost seriousness," acknowledging that its Taiwan unit had failed to adequately supervise its former employee. The Japanese company pledged to strengthen its information management systems and related controls.

Neither the investigation nor the court ruling found any organizational involvement by Tokyo Electron, the company said, adding that it remains committed to enhancing corporate value and meeting stakeholders' expectations.