Tokyo Electron vows to tighten compliance after Taiwan unit indicted

Taipei, Dec. 4 (CNA) Japan-based chip equipment maker Tokyo Electron Ltd. (TEL) said Wednesday it will strengthen compliance across all subsidiaries, after prosecutors indicted Tokyo Electron Taiwan Ltd. over the alleged theft of Taiwan Semiconductor Manufacturing Co.'s (TSMC) confidential 2-nanometer (2nm) technology.

TEL stressed, however, that the entity facing indictment is Tokyo Electron Taiwan Ltd., not TEL, and said its internal review found no organizational involvement or external leakage.

Prosecutors at the Intellectual Property Branch of the Taiwan High Prosecutors Office on Tuesday charged Tokyo Electron Taiwan Ltd. with four violations of the Trade Secrets Act and National Security Act, seeking fines of NT$40 million, NT$8 million, NT$40 million, and NT$40 million for each alleged offense. The total enforceable penalty sought is NT$120 million (US$3.82 million), the office said.

• Prosecutors seek NT$120M fine against Tokyo Electron Taiwan in TSMC case

It was the first time a legal entity has been indicted under the National Security Act over the alleged theft of National Core Key Technology.

According to prosecutors, Tokyo Electron Taiwan Ltd. failed to properly supervise former employee Chen Li-ming (陳力銘), relying on internal rules rather than concrete preventive controls to ensure he could not access or leak protected technology.

In August, the branch indicted Chen and two former TSMC engineers -- Wu Ping-chun (吳秉駿) and Ko Yi-ping (戈一平) -- for allegedly providing confidential 2nm process information to Tokyo Electron Taiwan Ltd.

In a statement released Wednesday, TEL said its Taiwan subsidiary was charged over supervisory obligations relating to a former employee, but that neither TEL nor Tokyo Electron Taiwan Ltd. directed or engaged in technology theft.

It added that the company maintains around-the-clock monitoring systems to prevent information leakage.