The TSMC 2nm Trade Secret Theft Cases: Why Taiwan Is Suing Its Closest Allies

Partners in public, legal adversaries in private. TSMC just sparked a geopolitical firestorm by targeting firms from its two closest partners—the U.S. and Japan—over intellectual property theft. As of January 10, 2026, the lawsuits involving Intel and Tokyo Electron (TEL) aren't just corporate disputes; they're the first major test of Taiwan's beefed-up national security laws.

TSMC 2nm Trade Secret Theft Cases vs. Intel and TEL

At the heart of the conflict lies TSMC's crown jewel: its 2-nanometer (2nm) node process. Earlier this year, several employees allegedly funneled secrets to Tokyo Electron. Simultaneously, Lo Wei-jen, a former top executive, moved to Intel shortly after retirement, allegedly carrying 2nm secrets with him. Taiwan’s High Prosecutors Office is now investigating these cases under the National Security Act (NSA).

Lawmakers amended the NSA in 2022 to create a specific category for 'National Core Critical Technology' theft. The stakes are high: violators face 5 to 12 years in prison and fines reaching $3 million. This legislative shift reflects Taiwan's urgency to stop the talent and technology drain to China, though these current cases ironically target allied nations' firms.

Navigating the Trump Administration and Trade

The timing's tricky. Taiwan's currently negotiating a trade deal with the Trump administration, and TSMC has already pledged $100 billion in U.S. investments to maintain political favor. Suing Intel, which is 10 percent owned by the U.S. government, could be seen as an embarrassment to Washington’s reshoring efforts. According to the Financial Times, some investors worry this move isn't a "good look" for Taiwan's diplomatic relations.

However, TSMC maintains it's simply protecting its legitimate IP. Tokyo Electron has already fired the employees in question and promised to boost internal compliance. Critics argue that Taiwan's real challenge isn't just IP law, but the need for a modern export control system that doesn't rely solely on private companies to initiate investigations.