Taiwan’s Landmark Ruling Redefines Trade Secret Protection and National Security in Advanced Technology

A landmark criminal ruling in Taiwan has significantly reshaped the landscape of intellectual property enforcement, particularly concerning trade secret prosecutions and national security within advanced technology industries. On April 27, 2026, Taiwan’s Intellectual Property and Commercial Court issued its first-instance verdict in a high-profile case involving alleged theft of advanced Taiwan Semiconductor Manufacturing Company (TSMC) process technology, leading to the first convictions under Taiwan’s 2022 law protecting “national core critical technologies”.

The court sentenced Chen Li-ming, a former TSMC employee who later joined the marketing department of Tokyo Electron’s (TEL) Taiwan subsidiary, to 10 years in prison. Chen was found guilty of unlawfully obtaining sensitive sub-14nm “processes and related key gases, chemicals, and equipment technology” from TSMC, leveraging his past relationships with former colleagues to secure proprietary information. His actions were deemed to have “endangered the international competitiveness of the industry and national economic security” by risking the external leakage of TSMC trade secrets. This ruling marks the first time Taiwan has applied the “economic espionage” clause of its National Security Act to convict semiconductor technology theft.

Three other engineers, Ko Yi-ping, Wu Ping-chun, and Chen Wei-chieh, also received sentences ranging from two to six years for their involvement. Furthermore, Tokyo Electron Taiwan, the local unit of the Japanese company, was fined T$150 million (approximately US$5 million) by the court. Another report indicated a fine of approximately NT$1.5 billion (approx. $22.0 million) and an order to pay TSMC approximately NT$1 billion (approx. $14.7 million) in compensation. The court stated that Tokyo Electron had “failed to properly fulfil its corporate social responsibility in supervising its employees”. Tokyo Electron, however, stated that its internal investigation found no evidence of organizational involvement and that the trade secrets were not disclosed to any third party, pledging to enhance oversight of its information management system.

This case highlights a broader shift in Taiwan towards treating cutting-edge semiconductor know-how as a national-security asset rather than conventional intellectual property. Exclusive insights from Taiwanese practitioners indicate that this ruling will have significant implications for how trade secrets are protected and enforced, especially in the context of advanced technology industries, emphasizing the increasing intersection of national security concerns with intellectual property protection in international trade. Analysts suggest the leaked technology involves critical 2nm and 1.4nm process nodes, making the commercial loss difficult to quantify. TSMC has declared a zero-tolerance policy for trade secret violations and committed to strengthening internal controls.