The legal battle between TSMC and its former Senior Vice President Wei-Jen Lo continued to escalate dramatically, with Taiwanese prosecutors conducting searches of Lo’s residences as part of a criminal investigation into alleged trade secret theft.
The prosecutors of the intellectual property branch raided Lo’s homes in Taipei and Hsinchu earlier this week, seizing computers, USB drives, and other electronic devices that may hold evidence.
The investigation now goes well beyond TSMC’s civil lawsuit and looks at whether Lo breached Taiwan’s National Security Act by possibly taking sensitive semiconductor technology secrets to Intel.
A court has granted a request by prosecutors to freeze Lo’s assets, including shares and real estate, in a sign of the seriousness of the allegations. Specifically, investigators are said to be focusing on whether Lo took documents related to the development of TSMC’s state-of-the-art 2nm process, as well as proprietary information about the company’s A14 and A16 manufacturing processes, with him when he left for Intel.
TSMC Sues Former Executive for Non-Compete Violation Over Move to Intel, Citing 2nm Trade Secret Risk
TSMC filed its civil lawsuit this week in Taiwan’s Intellectual Property and Commercial Court, citing violations of Lo’s employment contract, particularly the non-compete agreement he signed.
Semiconductor giant TSMC argues that there’s a significant risk Lo could exploit, leak, or transfer TSMC trade secrets and confidential information to Intel, justifying legal intervention.
The company’s concerns aren’t unfounded. Lo held one of the most sensitive roles at TSMC, overseeing advanced process development and research.
During his time, he led teams that secured thousands of patents around the world and were instrumental in developing several next-generation chip manufacturing technologies. His strategic input was significantly pivotal to setting the roadmaps for TSMC toward the 2nm node-the bleeding edge of semiconductor manufacturing.
The Taiwan government has also become aware of the case. According to Economy Minister Kung Ming-hsin, officials will closely monitor whether the situation has the potential to impact Taiwan’s semiconductor industry negatively or damage relationships with customers. The Ministry of Economic Affairs has pledged full cooperation with the High Prosecutors’ Office throughout the investigation.
That reflects not only Taiwan’s standing as a global semiconductor powerhouse but also the fact that TSMC is currently the most advanced chip maker in the world, supplying key customers such as Apple, NVIDIA, and AMD. Any technological compromise of the Taiwan Semiconductor Manufacturing Company would have wide ramifications for Taiwan’s economy and national security.
Intel’s CEO, Lip-Bu Tan, recently sent an internal memo to employees addressing the allegations head-on. Tan firmly defended Lo and rejected TSMC’s claims. Tan clarified that Intel “sees no merit to the allegations” while standing behind both its employee and its hiring principles.
The Battle for Semiconductor Engineering Talent
According to Tan’s memo, Lo will be working in Intel’s manufacturing group and packaging business, where it is expected he will play a role in revitalizing the company’s engineering culture. The hire comes as Intel is trying to regain its technological leadership in chip manufacturing after falling behind the likes of TSMC and Samsung in recent years.
The case carries particular irony given Lo’s employment history. He originally spent 18 years at Intel, managing a development factory in Santa Clara, California, before joining TSMC in 2004 as Vice President. Lo steadily rose through the ranks to Senior Vice President with deep expertise in semiconductor manufacturing over his two-decade-long tenure at the Taiwanese chipmaker.
But now, his return to Intel has triggered one of the most high-profile legal disputes the semiconductor industry has seen lately, putting into question the employee mobility in an industry where knowledge and expertise are fundamental.
This also isn’t the first recent fight that TSMC has taken up over trade secrets. In August, it filed a lawsuit against three individuals who, it said, had stolen confidential information for the benefit of a Japanese competitor. The cases reflect the cutthroat competition in the semiconductor business, in which even incremental technological leads can be worth billions of dollars.
Intel found itself facing a similar decision last year when it sued a former engineer accused of stealing 18,000 files marked “top secret.”
The semiconductor industry will be closely watching as the investigation unfolds. The decision may mean setting important precedents for protecting trade secrets, as well as the kind of restrictions companies can place on departing executives in Taiwan’s crucial tech sector.
