Ex-TSMC manager indicted over alleged bid to leak secrets to China

Taipei, July 20 (CNA) A former executive at Taiwan Semiconductor Manufacturing Co. (TSMC) has been indicted for allegedly attempting to leak TSMC's core technologies to China, prosecutors said Monday.

The Taiwan High Prosecutors Office's Intellectual Property Prosecutors Office said the former deputy manager, surnamed Chen (陳), has been charged with violating the National Security Act and the Trade Secrets Act and that prosecutors have requested a seven-year prison sentence.

In explaining the recommended sentence, prosecutors said TSMC's technological leadership is critical to Taiwan's economy and to the global competitiveness of its semiconductor industry, and Chen's actions threatened Taiwan's technological advantage.

The case emerged from a separate investigation into an alleged Chinese espionage network in Taiwan developed by Hong Kong national Ding Xiaohu (丁小琥), prosecutors said.

Investigators said Ding, acting on instructions from the Nanning station of the Chinese Communist Party's Central Military Commission Political Work Department, repeatedly entered Taiwan to recruit agents and gather intelligence on Taiwan's critical technologies and trade secrets.

Through an intermediary surnamed Huang (黃), Ding allegedly recruited Chen, then a deputy manager at TSMC, the world's largest contract chipmaker.

Between May 2023 and February 2024, Chen and Ding allegedly planned to establish a semiconductor materials analysis company in China called CSMAC.

Chen drafted a "Blue Ocean Project" to recruit Taiwanese semiconductor talent to the company to help advance China's chip industry, prosecutors alleged.

To demonstrate his technical expertise to prospective Chinese investors and advisers, Chen allegedly made unauthorized copies of 21 classified and general trade-secret documents belonging to TSMC and took them home with the intention of using them in China.

TSMC detected the irregularities through an internal investigation and recovered all of the copied documents before any technology was transferred, prosecutors said.

Authorities searched five locations on May 28, questioned three suspects, including Chen, and one witness. Chen was then ordered to be detained and held incommunicado by the Intellectual Property and Commercial Court.

Ding was not prosecuted because he died.