TSMC Dismisses Employees in Major 2nm Technology Leak Case

Taiwan’s TSMC, the world’s top contract chipmaker, is dealing with a sharp security crisis after laying off several employees and alerting authorities about a trade secrets leak surrounding its prized 2-nanometer technology. The arrest of three suspects, all current or former TSMC staff, escalates concerns over global chip security.

Routine internal monitoring flagged unusual activity in July, prompting TSMC to launch a swift internal probe. Evidence of unauthorized access to confidential 2 nm chip files led to the involvement of law enforcement and national security officials, a sign of the rising stakes in semiconductor espionage.

First Major Enforcement Under Taiwan’s National Security Act

Prosecutors say this is the first significant case under Taiwan’s strengthened National Security Act targeting semiconductor secrecy violations. The accused allegedly sought to steal or pass on information from what Taiwan deems “national core technology.” Taiwan’s updated law, honed in 2022, now imposes up to 12 years in prison and fines over $3 million for such breaches.

Did you know?
TSMC’s 2nm chip process is so advanced that Taiwan classifies it as 'national core critical technology' under laws designed for military-grade secrets.

How the Leak Was Detected

TSMC’s monitoring systems noticed abnormal access to 2nm technology files, vital for powering the next generation of smart devices. The investigation quickly focused on a handful of employees who, according to authorities, demonstrated intent to unlawfully obtain technical data. Prosecutors moved in, conducting searches and making arrests between July 25 and July 28.

Why 2nm Technology Is So Strategic

The 2nm process stands as the leading edge of chipmaking, promising up to 15% faster performance and 30% greater power efficiency than current 3nm technology. Next-generation gadgets, including the anticipated iPhone 18 with its breakthrough A20 processor, will use these chips. Only TSMC, Samsung, Intel, and Japan’s Rapidus are on track to produce at this node.

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Corporate Response and Ongoing Investigation

TSMC issued a strong statement reaffirming its “zero-tolerance policy” for trade secret violations. The company is pursuing legal action while working with authorities to determine whether any information was transferred outside Taiwan or involved additional accomplices. One of the arrested individuals, surnamed Chen, is a former employee, though further identities remain confidential as investigations continue.

Rising Stakes Amid Record Profits

The crisis comes just as TSMC reported a record-setting second quarter: profits surged over 60% to $13.5 billion, mainly driven by AI chip demand. A remarkable 74% of wafer revenue now comes from advanced process technologies, underscoring the immense commercial value of the leaked information.

National and Global Ramifications

The breach has intensified scrutiny of the global chip supply chain, highlighting the critical role of Taiwan and its new legal framework. The country produces over 60% of the world’s semiconductors, making control over its leading-edge technology an issue of national, and indeed global, security.

As the investigation unfolds, TSMC’s experience will likely shape how tech leaders and governments approach insider threats and high-stakes espionage in the race for chip supremacy. The global tech industry is now closely monitoring TSMC's next moves and Taiwan's law enforcement response.