TSMC 2nm Trade Secret Case Intensifies as Engineers Face Up to 14 Years in Prison Over Alleged Smartphone Photo Leak
Taiwan’s high profile TSMC trade secret case has entered a more serious phase, with prosecutors now pursuing lengthy prison terms against individuals accused of stealing confidential 2nm process information. According to a recent UDN report, the case involves former and current TSMC engineers, with prosecutors alleging that sensitive 2nm related materials were copied using a smartphone camera and then used to support outside commercial interests. Reuters previously reported that Taiwanese prosecutors had already indicted multiple people in the case and were seeking a combined 14 year prison term for the lead defendant under Taiwan’s trade secrets and national security laws.
The core allegation is that the stolen information was meant to strengthen equipment positioning around TSMC’s 2nm production line. UDN says prosecutors believe former TSMC engineer Chen Liming repeatedly sought key technical and trade secret information from then current TSMC engineers Wu Bingjun and Ge Yiping between 2023 and the first half of 2024. Prosecutors allege the material was reproduced and reviewed so that Tokyo Electron’s Taiwan operation could improve etching tool performance and increase its chances of qualifying for mass production supply at TSMC’s 2nm etch sites. Reuters separately reported in 2025 and 2026 that prosecutors accused former TSMC employees of trying to use the company’s trade secrets to help Tokyo Electron compete for TSMC supplier deals tied to the 2nm process.
What makes this case especially striking is the method described in local reporting. UDN says prosecutors later uncovered an additional allegation that in May 2024, a former TSMC engineer was instructed to use a smartphone to secretly photograph dozens of confidential materials related to 2nm process raw materials and equipment technologies. The same report says prosecutors also suspect that a Tokyo Electron Taiwan marketing manager deleted TSMC confidential data from cloud storage after the case became public. Reuters has reported related additional indictments, including accusations that prosecutors found TSMC trade secrets in the Taiwan unit’s cloud storage and that one defendant was suspected of destroying criminal evidence.
Legally, this is no routine corporate leak case. Reuters reported that prosecutors said the matter was the first case brought under Taiwan’s National Security Law involving alleged theft of core technologies. In the earlier phase, prosecutors sought a 14 year prison term for the lead defendant, while later additional indictments sought 7 years for one former employee, 8 years and 8 months for another, and 1 year for a third defendant. UDN adds that in the original prosecution, Chen Liming was sought for 14 years, Wu Bingjun for 9 years, and Ge Yiping for 7 years, while a second prosecution added further charges and penalties tied to the later smartphone photography allegation.
The broader industry significance is obvious. TSMC’s 2nm node is one of the most strategically important semiconductor technologies in the world, not just for Taiwan but for the global chip ecosystem. That is why Taiwan has taken the matter so seriously, and why this case has become a major example of how semiconductor trade secret enforcement is increasingly being treated as a national security issue rather than only a commercial dispute. Reuters reported that prosecutors also charged Tokyo Electron’s Taiwan unit under the National Security Act and Trade Secrets Act, with the company potentially facing fines of up to T$120 million, while Tokyo Electron has said it did not confirm organizational involvement by the parent company.
For TSMC, the case is also a reminder that the biggest risk around advanced process technology is not only external competition, but insider access. Even with highly controlled fabs and internal security systems, human access points remain one of the hardest parts of the chain to fully secure. The allegation that a smartphone camera could become part of a 2nm trade secret case underlines just how low tech the breach mechanism can be, even when the stolen material relates to some of the most advanced manufacturing technology on earth. That final point is an inference based on the allegations described in UDN and the indictments reported by Reuters, not a final court finding.
With sentencing exposure now reaching as high as 14 years and the court process moving ahead, this case is likely to remain one of the most closely watched semiconductor legal battles in Taiwan. It is not just about one employer, one supplier, or one group of engineers. It is about how aggressively Taiwan is prepared to defend the industrial knowledge sitting at the heart of the global chip race.
What do you think matters more here, stronger legal deterrence after the fact, or much tighter internal controls before sensitive process data can ever leave the building?
