The world’s largest chipmaker Taiwan Semiconductor Manufacturing Company (TSMC) revealed on Tuesday that it had detected “unauthorized activities” that led to the discovery of potential trade secret leaks.
The company told CNBC that it has taken “strict” actions against those involved, and 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.”
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TSMC added that the issue was identified earlier due to its “comprehensive and robust monitoring mechanisms.” Internal monitoring systems that flagged suspicious activity helped discover the breach, according to Nikkei Asia. An internal investigation confirmed deliberate attempts to exfiltrate trade secrets. The implicated employees have been dismissed, and legal action has been initiated against them.
While the precise nature of the leaked information hasn’t been revealed, sources suggest the attempt focused on the core elements of its 2-nanometer (nm) chip manufacturing process. Analyst Ming-Chi Kuo believes Apple will be among the first to use the new 2nm node with the A20 chip likely to feature in all iPhone 18 models.
This isn’t the first time TSMC has been a target for such leaks. In 2018, a Taiwanese court indicted a former employee for copying trade secrets related to the 28-nanometer fabrication process, with intent to transfer them to a semiconductor company in mainland China.
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Semiconductors have risen in importance of late with the artificial intelligence boom. They are key pillars for the AI industry, and rising geopolitical tensions have highlighted the competitive technological advantages of major firms in the chip supply chain like TSMC and other leaders across the board. TSMC currently dominates the semiconductor manufacturing market, and has tech giants like Apple, and Nvidia as its clients. According to the company’s account, TSMC has more than 200,000 trade secrets recorded in its internal system.
TSMC as a company has only grown in relevance with the AI boom. It achieved its first market value crossing of $1 trillion in Taipei last month. This made it the first Asian company to cross the $1 trillion mark in market value since PetroChina’s short-lived rise back in 2007. The company has also been noted to have significantly grown its footprint in the U.S., with its Arizona chip factories having officially started production, supported by $6.6 billion in funding from the CHIPS Act. In addition to reducing supply chain obstacles, this move also puts the company in a stronger political spot, potentially opening the door to more support from the U.S. government down the line. In 2025 alone, it’s set to invest between $38 and $42 billion, as part of a larger $100 billion global expansion focused on advanced chip-making sites in Arizona, Japan, and Germany.