Dr. Jeremy Chih-Cheng Chang, CEO of the DSET and Director of its Economic Security Program, and Nathanael Cheng, Policy Analyst with the same program, recently published a joint op-ed in The Diplomat titled “TSMC’s Trade Theft Cases Aren’t a ‘Bad Look’ for Taiwan.”The article examines the legal implications of recent trade secret cases involving Taiwan’s semiconductor industry and draws broader lessons for Taiwan’s economic security policy, urging a comprehensive upgrade of Taiwan’s export control framework.
The op-ed argues that Taiwan’s recent prosecutions of former employees for trade secret theft—despite involving firms from the United States and Japan—should not be misinterpreted as Taiwan “turning against” its closest partners. Rather, these cases reflect companies legitimately protecting their intellectual property rights and demonstrate that Taiwan’s trade secret protection system is functioning as intended. Taiwan’s commitment to deepening commercial and technological cooperation with like-minded partners, the authors emphasize, remains unchanged.
The article further explains that the key legal basis for these cases lies in Taiwan’s National Security Act, which provides enhanced protection for trade secrets involving National Core Critical Technologies (NCCT). Under the previous Trade Secrets Act, no distinction was made between ordinary commercial trade secrets and technologies with national security implications, and penalties were relatively light—insufficient to deter the outflow of critical technologies. In response, Taiwan amended the National Security Act in 2022 to create a separate offense for NCCT trade secret theft, significantly increasing criminal penalties and fines and reflecting heightened concern over economic security risks.
Dr. Chang and Cheng also note that Taiwan’s legal framework, similar to that of the United States, places responsibility on companies to establish robust internal compliance and information management mechanisms. In some cases, foreign firms are not accused of directly stealing trade secrets, but of failing to adequately prevent the improper inflow of third-party information. This design aims to raise overall corporate compliance standards rather than to target specific countries or companies.
At the same time, the op-ed stresses that trade secret protection alone is insufficient to address the broader challenge of technology outflows and economic security risks facing Taiwan. Because NCCT protections are embedded within a trade secret framework, they remain private rights in practice. As a result, prosecutors often depend heavily on the cooperation of rights holders, and cases involving national security risks may be difficult to pursue if companies decline to cooperate for commercial reasons.
While acknowledging that Taiwan has taken steps to align more closely with U.S. export controls—such as adding advanced semiconductor equipment and quantum computers to its Strategic High-Tech Commodities control list and restricting exports to certain Chinese firms—the authors argue that Taiwan’s export control system still requires deeper, more systematic reform.
The op-ed concludes by echoing recommendations from DSET’s Economic Security Program report, Walking a Tightrope: Navigating Taiwan-U.S. Semiconductor Security Under Trump 2.0, calling on Taiwan to modernize its export control list regime, establish clearer export control principles, and enhance transparency in entity list adjustments. Only through such reforms, the authors argue, can Taiwan both deepen allied integration and effectively safeguard its core technologies and economic resilience.
