Taiwan Raids Former TSMC Executive’s Home Over Trade Secrets Probe

Raids escalate a high stakes chip dispute

Taiwanese prosecutors have searched two homes linked to former Taiwan Semiconductor Manufacturing Co. senior executive Wei Jen Lo, seizing computers, USB drives and other digital devices as they investigate allegations of trade secret leakage to his new employer, Intel. The action follows a civil lawsuit that TSMC filed in Taiwan’s Intellectual Property and Commercial Court, alleging a high probability that its confidential know how was taken or disclosed as Lo left the company and rejoined Intel in October. Intel has denied the claims and says it supports its returning employee.

Prosecutors said Lo is suspected of violating Taiwan’s National Security Act, a statute that has been updated in recent years to protect strategic technologies central to the island’s economy and security. A court also approved a petition to freeze Lo’s shares and real estate as the probe proceeds. The case is unfolding on two tracks, a civil lawsuit by TSMC and a parallel investigation that could lead to criminal charges if evidence supports a breach of national security or trade secret laws.

The dispute reaches into the core of the global chip business. TSMC is the world’s largest contract chipmaker, producing leading edge processors for companies including Apple and Nvidia. Lo spent more than two decades at TSMC and helped lead mass production of advanced nodes such as 5 nanometer, 3 nanometer and work toward 2 nanometer. The company now alleges that sensitive information tied to some of its most advanced processes may have been at risk as Lo moved to Intel.

The executive at the center of the probe

Wei Jen Lo is a veteran of both TSMC and Intel. Before joining TSMC in 2004, he spent 18 years at Intel. He rose through the ranks at TSMC to become a senior vice president overseeing research, technology development and the transition of new manufacturing nodes into volume output. He retired from TSMC in July after a 21 year run, then rejoined Intel in October in a senior role related to manufacturing and research.

At TSMC, Lo’s work spanned several of the company’s most sensitive areas, including yield improvement, process integration and the ramp of nodes that power modern smartphones, data centers and artificial intelligence accelerators. That level of seniority and access is central to TSMC’s concerns. The company argues that process know how accumulated over decades, including detailed engineering flows and proprietary data, cannot be replicated easily and must be shielded to protect years of investment.

What prosecutors and TSMC say happened

TSMC alleges that Lo may have used, leaked, disclosed or transferred trade secrets to Intel as he left the company and took a new role. It filed its suit in Taiwan’s specialized Intellectual Property and Commercial Court citing his employment obligations, confidentiality rules, a non compete agreement and Taiwan’s Trade Secrets Act. Prosecutors, acting on a search warrant, later raided two of his residences and seized digital media for forensic review. They said Lo is suspected of violating the National Security Act, and a court authorized the freezing of his stock holdings and real estate.

In a statement explaining why it took legal action, TSMC framed the risk in plain terms, saying the probability of harm to its proprietary information was too high to ignore. The company said it had no choice but to seek court remedies to protect core technology that underpins its leadership in advanced chipmaking.

Introducing its position publicly, TSMC said the legal step was needed because it believes confidential data may have been misused. The company stated:

There is a high probability that Lo uses, leaks, discloses or transfers TSMC’s trade secrets and confidential information to Intel, thus making legal actions necessary.

Authorities have not disclosed the detailed scope of the probe. Local reporting and industry chatter suggest investigators are examining whether any documents or data related to 2 nanometer class development or TSMC’s angstrom era processes, A16 and A14, were retained or transferred. Prosecutors have not confirmed those specifics, and no criminal charges have been filed. Taiwan’s Ministry of Economic Affairs said it is closely monitoring the case given the strategic importance of semiconductor intellectual property.

Intel’s response and how companies wall off third party IP

Intel has pushed back, saying it has reviewed what it knows and sees no reason to believe the allegations are true. The company also stressed that it runs strict compliance programs that prohibit the use or transfer of third party confidential information. Intel has welcomed Lo back and said he is respected in the industry for integrity, leadership and technical skill.

Introducing the company’s position, an Intel spokesperson said the firm enforces rigorous internal controls on intellectual property and employee conduct. The statement reads:

Based on everything we know, we have no reason to believe there is any merit to the allegations involving Mr Lo. We take these commitments seriously.

Intel also highlighted a long standing reality in the chip sector: movement of engineers and executives between firms is common. The company said talent mobility is normal and healthy for the industry, provided that all parties respect legal and ethical boundaries.

Large chipmakers typically enforce a web of safeguards aimed at preventing improper transfer of trade secrets. Common measures include mandatory exit interviews, device audits, access revocation, monitoring of file downloads in the weeks before departure, and clear guidance to new hires about what they can and cannot bring with them. On the receiving side, companies often require written affirmations that a new hire will not use a previous employer’s confidential information, and they structure job duties to avoid exposure to overlapping proprietary content.

Why 2 nm, A14 and A16 matter for chip leadership

Process nodes described as 5 nanometer, 3 nanometer or 2 nanometer are shorthand labels used by chipmakers to mark each new generation of manufacturing technology. The nanometer number does not map directly to a single physical dimension anymore, but it signals broad advances. Moving to a new node usually delivers higher transistor density, better performance at a given power level, and lower energy use for the same compute task. That is why modern phones, laptops and data center accelerators see big gains when they migrate to a newer process.

TSMC’s 2 nanometer generation is expected to use a new type of transistor structure called gate all around. This design helps reduce leakage current and enables better control of the transistor channel, which can improve power efficiency. The step also relies on extreme ultraviolet lithography, an optical technique that uses very short wavelength light to etch fine features onto silicon wafers.

Beyond 2 nanometer, TSMC has signaled angstrom era processes called A16 and A14, which would push density and efficiency even further. Names in angstroms, where 1 angstrom equals 0.1 nanometer, reflect a marketing shift as industry labeling moves below the 2 nanometer umbrella. The engineering know how for these nodes spans thousands of process steps, chemical recipes, tool settings, yield learning playbooks, and design rules that customers use when building chips. Much of this information is protected as trade secrets rather than patents because it can be difficult to describe publicly without giving away competitive advantages.

This is why executives who work on advanced nodes are often subject to long cooling off periods and strict confidentiality terms. Even unintentional recall of process practices can create legal risk if a court finds that proprietary information was used at a new employer.

Inside Taiwan’s legal process and potential outcomes

The current matter is moving on two fronts. The civil case that TSMC filed in the Intellectual Property and Commercial Court allows the company to seek injunctions, damages and other remedies. Remedies could include orders that limit a former employee from working on certain technologies for a set period or require the return and destruction of any retained materials. The court specializes in complex commercial and intellectual property disputes and can act quickly on urgent motions if a company shows risk of irreparable harm.

In parallel, prosecutors are examining whether criminal statutes were broken. Taiwan’s Trade Secrets Act penalizes theft or unauthorized use of trade secrets, and penalties increase if the offense benefits a foreign entity. The National Security Act covers the protection of core national technologies and state security interests. Recent amendments have expanded the focus to include safeguarding advanced semiconductor know how. Convictions can bring heavy fines and prison sentences, especially if a case is tied to core technologies that the state deems strategic.

Searches and asset freezes are early stage tools. A search aims to secure potential evidence before it can be altered or destroyed. Freezing stock and property prevents the dissipation of assets that might be used to satisfy a future civil judgment, and it can also ensure a defendant remains within reach of the court. None of these steps alone proves wrongdoing, and investigators must still show that specific trade secrets existed, were subject to reasonable secrecy measures by TSMC, and were acquired or used without authorization.

If prosecutors eventually bring charges, the case would proceed to indictment and trial. If they do not find sufficient evidence, the criminal inquiry could be closed while the civil suit continues. Intel’s exposure would depend on evidence that the company acquired or used TSMC secrets, which is not alleged in the civil filing at this stage. For now, the focus is on the conduct of the former executive and the protection of TSMC’s information.

Market reaction and a race for foundry customers

The lawsuit and raids caught investors’ attention. TSMC shares fell by about 3 percent earlier in the week when the suit became public, reflecting concern about legal uncertainty and the broader competitive landscape. Intel’s stock showed a smaller move. The financial impact will depend on how the investigation evolves and whether any restrictions are placed on specific work streams or customer programs.

TSMC remains the leader in commercial deployment at 3 nanometer and below, with a deep pipeline of customer designs. Intel is pushing to regain ground through its Intel Foundry strategy. Its 18A process, which the company says is in preproduction, is intended to serve external customers as well as Intel’s own products. Winning complex, long duration orders requires trust in process roadmaps, delivery schedules and intellectual property protections. Any legal cloud around a senior hire is a distraction for a company seeking to sign more large customers, even if the allegations ultimately prove unfounded.

Samsung is also competing at the leading edge, and all three companies are investing heavily in next generation lithography, packaging and design enablement. The outcome of the case will not change the need for each firm to keep strict firewalls around confidential information when they recruit senior talent from rivals.

Mobility, non compete rules and a rising focus on trade secrets

Movement of experts is a reality in the tight knit semiconductor community. Engineers build careers across multiple firms, and companies want that experience. At the same time, trade secret protection has become a priority for corporate boards and governments because advanced nodes and packaging methods carry outsize economic value. Taiwan, the United States, South Korea, Japan and Europe have all tightened rules and enforcement on economic security concerns tied to chips.

Non compete agreements are a key tool, though their enforceability varies by jurisdiction. In Taiwan, courts can enforce non competes if they are reasonable in time, geography and scope, and if employers provide suitable compensation. Even with a non compete, companies must still prove that specific trade secrets are at issue. Courts look for concrete evidence such as unusual file access patterns, downloads to external media, undisclosed cloud storage, or the presence of proprietary documents on personal devices.

TSMC itself has pursued previous cases involving suspected theft of sensitive process information. Companies also use practical safeguards. Work separation can keep a new hire away from overlapping projects. Legal and compliance teams document a clean room approach where independent teams validate that any improvements come from public information or in house research. These measures cannot eliminate risk, but they strengthen a firm’s position if a dispute lands in court.

What happens next

Prosecutors will now analyze the seized devices and decide whether to bring charges under the Trade Secrets Act or the National Security Act. That forensic work may include timeline reconstruction of data access, recovery of deleted files, review of email and cloud usage, and interviews with potential witnesses. The civil court case will move forward in parallel, where TSMC could seek interim orders that limit Lo’s work on certain technologies while the case is heard.

Intel is likely to continue its internal review and compliance steps to document that it has not received or used any third party confidential information. Lo and his legal counsel will have opportunities to respond in court filings and to contest the asset freeze. Cases like this can take months or longer, depending on the complexity of the evidence and scheduling in court.

Key Points

• Taiwanese prosecutors raided two homes linked to former TSMC executive Wei Jen Lo and seized digital devices as part of a trade secrets probe.
• A court approved a freeze of Lo’s shares and real estate, and prosecutors said he is suspected of violating the National Security Act.
• TSMC filed a civil lawsuit in Taiwan’s Intellectual Property and Commercial Court, citing confidentiality rules, non compete terms and the Trade Secrets Act.
• TSMC says there is a high probability its secrets were used or disclosed; Intel denies the allegations and says it enforces strict IP controls.
• Investigators are examining whether data tied to 2 nanometer class development and TSMC’s A16 and A14 processes was retained or transferred.
• The case highlights the tension between talent mobility and protection of proprietary chipmaking know how at the leading edge.
• TSMC shares fell about 3 percent after the lawsuit became public; Intel shares moved less.
• Any criminal charges would follow a forensic review and would be separate from the civil suit now before Taiwan’s specialized IP court.