TSMC has discovered a possible leak of trade secrets related to its advanced chipmaking techniques

Prosecutors in Taiwan have arrested six individuals suspected of stealing trade secrets from Taiwan Semiconductor Manufacturing Co. (TSMC), launching a probe that could have significant national security implications given the company’s role as a global tech cornerstone.

TSMC, the primary chip supplier to companies like Nvidia Corp., alerted authorities after discovering that current and former employees may have illicitly accessed sensitive technology. According to Taiwan High Prosecutors Office spokesman John Nieh, six suspects were detained—two have since posted bail and one has been released. Prosecutors carried out home searches between July 25 and July 28 as part of the investigation, which now focuses on whether confidential data was passed to outside parties.

TSMC is the world’s leading advanced chipmaker, producing everything from Nvidia’s AI accelerators to Apple’s iPhone processors. The case comes amid a global AI arms race, with companies like Meta Platforms Inc. and DeepSeek pouring billions into servers and data centers for post-ChatGPT innovation.

On Tuesday, the Nikkei reported that TSMC had terminated several employees suspected of trying to acquire key details related to its 2-nanometer chip development—next-generation technology scheduled for mass production in the latter half of the year.

Authorities also searched the Taiwanese offices of Tokyo Electron Ltd., a Japanese supplier, according to the Financial Times. Tokyo Electron declined to comment.

TSMC said in a statement that it had taken disciplinary action against the individuals involved and had launched legal proceedings. The company noted that it had identified the breach early through internal investigations, though it offered no further details.

This case underscores TSMC’s strategic position at the heart of the global semiconductor supply chain and infrastructure expansion. The chip industry is experiencing unprecedented investment levels, with TSMC and rival Samsung Electronics Co. together committing over $30 billion annually to capital expenditures. Meanwhile, U.S. and Chinese tech giants are locked in a race to develop cutting-edge chips.