Taiwan charges former TSMC employee over chip technology theft allegations

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Taiwanese prosecutors charged a former TSMC worker on Monday over an alleged theft of closely guarded chip information. The case covers technology that Taipei lists among its national core assets.

Investigators say the former employee planned to use the stolen material in China. Prosecutors say the data involved methods protected under Taiwan’s national security rules.

The filing came one day after President Lai Ching-te spoke at the yearly convention of the Democratic Progressive Party. Lai told party members that Taiwan must protect its democratic system and reject pressure from Beijing.

He called that pressure “red terror” and said the island must not end up under Chinese rule. Lai won the presidency two years ago, while his party has kept its focus on a separate Taiwanese identity.

Taiwan widens its defense against Chinese legal and technology pressure

Beijing rejects that political stance because it considers Taiwan part of China. Chinese leaders treat the island as territory that cannot be separated, even though Taiwan runs its own government, military, courts, elections, and laws.

Lai said calm periods should not make Taiwan careless. He warned that Beijing is using what he called “legal warfare” alongside military and political pressure. His example was China’s new ethnic unity law, which could give Chinese authorities a written basis for action against people living beyond mainland China.

Taiwanese officials fear that law could be aimed at citizens whom Beijing labels separatists. It may support future attempts to charge, detain, or seek the arrest of Taiwanese people outside the island. China has rejected complaints about the measure. Taiwan says Chinese courts have no legal power over its people or territory.

This is now a part of the bigger battle regarding sovereignty, industrial secrets, and control over advanced computing. Taiwan has been protecting its best chip knowledge for many years now.

TSMC adds Arizona capacity as AI customers ask for more chips

Away from the criminal case, TSMC (NYSE: TSM) is speeding up work at its Arizona site. Chief Financial Officer Wendell Huang told CNBC that customers are placing orders around a demand cycle he expects to last several years.

The company has added $100 billion to its United States expansion plan. That brings planned Arizona spending to $265 billion. TSMC also raised expected capital spending for the full year to between $60 billion and $64 billion as AI chip orders keep factories busy.

Wendell said heavy demand from American customers and support from the United States government helped shape the new spending plan. “We’re seeing this strong-structure, multi-year demand, and we do not plan to leave any food on the table for anybody else,” he said.

He added that continued demand would allow TSMC to keep producing profitable growth for shareholders.

There are also alterations taking place concerning how production teams make use of their current factory floor space. TSMC is shifting some of its 5-nanometer production to 3-nanometers so that its clients can get their new chips much earlier. Nanometers refer to the size of the design of transistors. Smaller sizes mean that there will be more transistors on each chip.

The first Arizona production stage is already running with 4-nanometer technology, Wendell said. After Monday’s close, TSM shares were down about 3%.

TSMC still serves customers in China while following export control rules. China supplies about 8% of company revenue. Wendell also pointed to physical AI as a future business area. TSMC’s image sensor venture with Sony Group (NYSE: SONY) forms part of its specialty chip plans for customers building machines that interact with the physical world.

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