By Yang Jie in Tokyo and Joyu Wang in Taipei

Prosecutors in Taiwan indicted three people in a case about sensitive chip technology, alleging they stole information from Taiwan Semiconductor Manufacturing to help one of TSMC's top equipment suppliers, Tokyo Electron, win more orders.

The three were arrested earlier this month. Prosecutors said Wednesday in announcing the indictments that the alleged theft was aimed at helping Tokyo Electron compete for contracts.

Taiwanese prosecutors said a former TSMC employee, identified only by surname Chen, obtained sensitive files from former colleagues to benefit Tokyo Electron after joining the Japanese company's marketing division.

The case highlights the high stakes in the global race to develop chips classified as 2-nanometer, the most advanced currently on the market. TSMC, Samsung, Intel and other chip makers as well as their suppliers are competing for commercial advantage, while the governments backing them covet the geopolitical influence that comes from being cutting-edge.

Prosecutors allege the information, photographed and reproduced by Chen, was used to improve Tokyo Electron's etching machines as the supplier sought to get its tools onto TSMC's 2-nanometer production lines.

Chen and two other defendants, surnamed Wu and Ge, were charged under Taiwan's security laws with offenses including the theft and intended overseas use of core technologies. Prosecutors requested prison sentences of up to 14 years for Chen, nine years for Wu and seven years for Ge. Representatives of the three couldn't immediately be located for comment.

The case stems from a complaint TSMC filed on July 8 after it detected irregular access to confidential information.

Tokyo Electron said earlier this month that it has dismissed the employee named by prosecutors. The company said then that it was cooperating with authorities and was committed to the highest standards of legal compliance. It didn't reply to a request for comment Wednesday.

TSMC said Wednesday it would pursue trade-secret theft to the fullest extent possible and work with authorities to protect its competitive advantage.

TSMC is Taiwan's crown jewel, producing chips for clients such as Nvidia, Apple and Tesla.

Write to Yang Jie at jie.yang@wsj.com and Joyu Wang at joyu.wang@wsj.com

(END) Dow Jones Newswires

August 27, 2025 09:22 ET (13:22 GMT)

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