The Financial Times recently published an report titled “Taiwan probes leaks of vital chip technology,”examining Taiwan’s launch of investigations into potential leaks of critical semiconductor technologies under its expanded national security legal framework.
In the report, the Financial Times cites comments from Dr. Jeremy Chih-Cheng Chang, CEO of the Research Institute for Democracy, Society and Emerging Technology (DSET), who noted that these cases have established an important precedent for the industry. Dr. Chang emphasized that Taiwanese authorities have sent a clear signal that companies themselves must build robust internal compliance and prevention mechanisms to safeguard trade secrets.
According to the Financial Times, Taiwanese prosecutors have recently initiated trade secrets investigations in the semiconductor sector under the broadened national security laws. These cases include charges against the Taiwanese subsidiary of Japanese semiconductor equipment maker Tokyo Electron for allegedly failing to prevent the misappropriation of TSMC trade secrets by former employees. Another case involves a former senior semiconductor executive who joined a foreign company after leaving a Taiwanese firm, with prosecutors investigating whether “national core critical technology” may have been transferred without authorization.
The Financial Times highlights that these cases have drawn particular attention because the entities involved are not Chinese companies, but firms from Japan and the United States—both regarded as Taiwan’s closest security and economic partners. In his remarks, Dr. Chang stated that the cases have set a key precedent: companies are responsible for establishing strong internal compliance mechanisms to protect against trade secrets theft. He further noted that as more countries seek to onshore semiconductor manufacturing, this issue will become a critical challenge for the entire semiconductor supply chain.
The report also recalls that Taiwan amended its national security legislation in 2022, formally criminalizing the unauthorized transfer of “national core critical technology” to foreign entities for the first time. The Financial Timesobserves that while current laws impose significantly heavier penalties for leaking trade secrets to China than to allies such as Japan and the United States, experts have pointed out that gaps remain. Former President Tsai Ing-wen had initially sought to grant the government broader authority to initiate investigations under national security powers; however, the version passed by the legislature allows prosecutors to act only after a Taiwanese company files a complaint, mirroring provisions in the U.S. Economic Espionage Act and similar legislation in Japan.
