Taiwanese authorities have escalated their legal actions against Tokyo Electron Taiwan and three individuals in a case involving the alleged theft of trade secrets from Taiwan Semiconductor Manufacturing Company (TSMC). This follows the discovery of new evidence during ongoing investigations.
On Monday, prosecutors announced new indictments against the defendants, which include two former TSMC employees and one ex-employee of Tokyo Electron Taiwan. The individuals, both surnamed Chen and one surnamed Lu, face serious charges as the prosecution seeks prison sentences ranging from one year to as much as eight years and eight months.
The case”s origins trace back to an indictment filed in August 2025, where one of the defendants, referred to as the first Chen, was already implicated. The recent developments stem from findings related to TSMC”s proprietary data, which were discovered stored on cloud systems associated with Tokyo Electron Taiwan.
Prosecutors have alleged that one of the accused, Lu, attempted to destroy digital evidence pertinent to the case. His actions of deleting files related to TSMC”s confidential technology have led to a request for a one-year prison sentence.
Interestingly, the second Chen, who faces a sentence of up to eight years and eight months, was not included in the initial charges. He is accused of unauthorized reproduction of critical TSMC trade secrets, amplifying the gravity of the situation.
In response to the ongoing legal situation, TSMC has issued a statement acknowledging the indictment but refrained from providing detailed comments as the matter is now under judicial proceedings. They did not address the latest forensic findings that prompted the new indictments.
In a related industry development, Nvidia is reportedly pushing for an increase in the production of its H200 AI chips through TSMC, with demand surging from Chinese companies that have ordered over two million units for 2026. Currently, Nvidia holds an inventory of around 700,000 H200 chips.
Despite ongoing supply constraints driven by high demand across various markets, Nvidia has set prices at $27,000 per chip for its Chinese customers, although shipments await approval from Chinese authorities despite U.S. export clearance granted under a prior order.
In market analysis, Goldman Sachs has adjusted its price target for TSMC shares, raising it to NT$2,330 from NT$1,720, maintaining a conviction buy rating based on optimistic forecasts for chip demand.
