World's largest chipmaker TSMC says it has discovered potential trade secret leaks

Taiwan Semiconductor Manufacturing Co. said on Tuesday that it had detected "unauthorized activities" that lead to the discovery of potential trade secret leaks.

The world's biggest semiconductor manufacturer told CNBC that it has taken "strict" disciplinary action against the personnel involved and that it has also launched legal proceedings.

"TSMC maintains a zero-tolerance policy toward any actions that compromise the protection of trade secrets or harm the company's interests," the company said.

"Such violations are dealt with strictly and pursued to the fullest extent of the law. We remain committed to safeguarding our core competitiveness and the shared interests of all our employees."

Semiconductors have grown in strategic importance in recent years as they have become the key pillar in the boom in artificial intelligence models and applications. Rising geopolitical tensions has put the spotlight on the competitive technological advantages of major firms in the chip supply chain like TSMC and other leaders across the board.

TSMC, headquartered in Taiwan, dominates the market for the manufacturing of the world's most advanced chips and counts major tech giants including Apple and Nvidia as clients.

As the case is now under judicial review, TSMC is unable to provide further information, the firm said.

TSMC identified the issue early due to its "comprehensive and robust monitoring mechanisms," the company said, adding that it carried out swift internal investigations.

Nikkei Asia, citing multiple sources familiar with the matter, reported on Tuesday that several former employees of TSMC are suspected of attempting to obtain critical proprietary information on 2-nanometer chip development and production while they were still working at the company.

Production of the 2-nanometer chip is among the leading edge manufacturing processes in the semiconductor industry currently. TSMC said it did not have any additional information to share when asked by CNBC about the Nikkei report.

As the world's leading chipmaker, TSMC has a treasure trove of intellectual property. By its own account, the company has previously said it has more than 200,000 trade secrets recorded in its internal system.

It is not the first time that TSMC has been the target for potential theft. In 2018, a Taiwanese court indicted a former employee for copying trade secretes related to the 28-nanometer fabrication process, with intent to transfer them to a semiconductor company in mainland China.

In 2023, ASML, which makes machines that are required to manufacture the most advanced chips, said that it discovered that a former employee in China had misappropriated data related to its proprietary technology.