Taiwan Semiconductor Manufacturing Company (TSMC) is confronting a significant industrial espionage scandal that has sent shockwaves through its investor base. The crisis centers on a former high-ranking executive now employed by arch-rival Intel, prompting serious legal action and raising questions about the intensifying battle for semiconductor supremacy.
Legal Action Against Former Executive Unveiled
Taiwanese prosecutors executed search warrants on November 26 and 27, targeting the residence of Lo Wei-jen, previously a Senior Vice President at TSMC. Authorities confiscated computers and storage devices during the operation. The situation escalated due to Lo’s career move: after departing TSMC in July 2025 following a 21-year tenure, he assumed the role of Executive Vice President at Intel just three months later.
The core allegation from TSMC involves the unlawful transfer of highly confidential data pertaining to its advanced 2nm, 3nm, and 5nm process technologies. These manufacturing processes are fundamental to TSMC’s leading position in the global chip market. The lawsuit is not only proceeding through the Commercial Court but is also being examined under Taiwan’s National Security Act, indicating the government perceives this as a threat to economic security.
Legal documents state, “There is a high probability that Lo is using or has passed on TSMC’s trade secrets and confidential information to Intel.”
Intel’s Firm Rejection of the Claims
Intel CEO Lip-Bu Tan responded decisively, labeling the allegations “rumors and speculation with no substance.” The corporation emphasized its commitment to intellectual property rights in internal communications, asserting there is “no reason to believe the claims have merit” and that it strictly adheres to policies prohibiting the use of external confidential data.
Should investors sell immediately? Or is it worth buying TSMC?
Market reaction was immediate. TSMC’s stock value declined by approximately 4.6 percent on November 25 when the lawsuit became public. With a current market capitalization of $1.5 trillion, any instability at TSMC carries substantial global ramifications.
The Broader Context: A Fight for Industry Dominance
This legal dispute transcends a simple personnel change. Intel is aggressively working to revitalize its foundry operations and capture market share from TSMC. The recruitment of Lo Wei-jen, who oversaw corporate strategy and research at TSMC, represented a major strategic acquisition. His move to a direct competitor within a 90-day period was viewed as highly provocative.
For TSMC, the stakes are existential. The firm commands over 60 percent of the worldwide foundry market and is the exclusive manufacturer of cutting-edge AI chips for clients like Nvidia and Apple. Taiwan regards its semiconductor sector as a matter of national security, explaining the severe response to this incident.
Next stages in the investigation include:
* Forensic analysis of seized evidence by prosecutors
* A pending decision on whether to file criminal charges
* Potential expansion of the probe to include Intel as a corporation
Despite the legal turmoil, most market analysts maintain a positive outlook on TSMC, citing strong fundamentals driven by relentless demand for AI infrastructure. Nevertheless, share price volatility is expected until the situation is resolved.
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