TSMC says former employee leaked secrets

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By Sumner Lemon

(IDG) -- Contract chip maker Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC) has accused a former employee of leaking trade secrets. Taiwanese authorities have completed their investigation and have sent the matter to the Hsinchu district court, the company said Thursday. The former employee's name was not disclosed.

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The company would not reveal the nature of the stolen information, but "It has nothing to do with 12-inch wafers," said TSMC spokeswoman Shan Shan Guo.

In a statement filed with Taiwan Stock Exchange Corp., TSMC said that more than one employee had sent confidential documents via e-mail to unauthorized third parties, possibly including one or more competitors. TSMC has taken disciplinary action against the employees involved and has referred the most serious case, involving the unnamed former employee, to the Taiwan Criminal Investigation Bureau.

If a competitor is determined to have received trade secrets from TSMC, the company will demand that the competitor respect its intellectual property rights and will pursue legal action against any party that violates those rights, the statement said.

The Taiwanese press reported Thursday that the former TSMC employee had sent confidential information related to wafer production to a rival chip maker in mainland China.

Contract chip makers in China, such as Semiconductor Manufacturing International Corp. (SMIC), which last year began production of 200-millimeter (8-inch) wafers, and Grace Semiconductor Manufacturing Corp., which is expected to begin production using 200-millimeter wafers this year, are seen as potential rivals to TSMC.

TSMC, however, has already begun to ramp up production using 300-millimeter wafers, which offer greater production capacity and lower unit costs -- giving the company an edge over competitors in China that use 200-millimeter wafers.

Over time, TSMC expects to increase its production capacity by 20 percent each year over the next five years as the company ramps up production in Taiwan using 300-millimeter wafers, according to Jack Sun, senior director at the company's Advanced Logic Technology Division.

The charges filed by TSMC against the former employee come as Taiwan's government wrestles with whether to lift restrictions on investment in 200-millimeter wafer plants in mainland China. A decision to lift the restrictions was initially expected to be made in December.

However, the government here has repeatedly delayed making a decision and the matter has now become a political issue, drawing the attention of political parties and other organizations opposed to liberalization of existing restrictions. Opponents of the plan to lift restrictions on investment in 200-millimeter plants in China fear that easing restrictions will mean that much of this production capacity will shift from Taiwan to China and result in the loss of jobs in Taiwan.