Last week, Republic of China prosecutors indicted a former employee of the Taiwan Semiconductor Manufacturing Company for allegedly stealing “critical national core technologies” in hopes of using the trade secrets to found a company in China. Only the surname of the accused person, Chen, is being reported by the Taipei Times, perhaps because he has not yet been convicted. He faces seven years in prison (July 21, 2026).
The investigation stemmed from a separate national security probe into Ding Xiaohu, a Chinese national holding a Hong Kong passport who was suspected of developing an espionage network in Taiwan and collecting confidential information for China. While reviewing evidence in that case, investigators discovered that Ding and Chen had allegedly conspired to obtain TSMC’s national core critical technology trade secrets and general trade secrets.
Ding died during the investigation, and prosecutors subsequently issued a non-prosecution disposition in his case.
Prosecutors said Chen conspired with Ding between May 2023 and February 2024 to establish the China Semiconductor Materials Analysis Co in China under a plan called the Blue Sea Project.
The project aimed to recruit Taiwanese semiconductor professionals to work in China and eventually bolster China’s chip supply chain with their expertise, prosecutors said.
Chen allegedly copied 21 confidential documents containing “national core” and other trade secrets pertaining to the manufacturing of semiconductors. TSMC detected signs of the theft and managed to recover the copies before they could be exploited.
According to the ROC’s 2022 National Security Act, key or critical “national core” technology is tech that “would seriously damage national security, industrial competitiveness, or economic development” if obtained by a “foreign hostile force” like Mainland China.
In April 2026, the Intellectual Property and Commercial Court in Taiwan convicted five persons for stealing trade secrets from TSMC to benefit Tokyo Electron, a major Japanese semiconductor firm. Which is bad, but not as bad as stealing cutting-edge technology for the People’s Republic of China.
