• Three TSMC employees arrested for alleged trade secret theft related to 2-nanometer technology.
• The case marks Taiwan's first prosecution under its amended National Security Act.
• TSMC implemented strict measures following routine monitoring that uncovered unauthorized activities.
• Concerns grow over Taiwan's competitive edge in the global semiconductor market amid US-China tensions.
• The investigation has broader implications for international technology and economic relations.

Taiwan Semiconductor Manufacturing Company (TSMC) has initiated legal proceedings and taken disciplinary action against three employees for suspected trade secret leaks related to the company’s proprietary 2-nanometer chip technology. This information was uncovered through regular internal monitoring, which revealed unauthorized access to sensitive information, prompting swift internal investigations and the involvement of legal authorities, according to TRT Global and Reuters.

The Taiwanese High Prosecutors Office confirmed that arrests were made after the firm reported the suspected leaks, with three employees detained, including two current staff and one former employee. They are accused of having unlawfully obtained trade secrets, raising serious suspicions of violating Taiwan's National Security Act, according to Channel News Asia and Reuters.

Investigations revealed that the breaches occurred when the suspects accessed confidential files and shared sensitive information about TSMC's cutting-edge technology. TSMC's technology is considered the most advanced globally for chip manufacturing, and the ongoing investigation aims to trace the deployment of leaked information, as well as to assess the potential involvement of external parties, as detailed by India Times and South China Morning Post.

This incident highlights growing concerns over the security of Taiwan's semiconductor industry, particularly as the global competition intensifies amid geopolitical tensions. The implications of this case could have lasting effects on Taiwan's standing in the semiconductor market, especially as it relates to international relations and economic security, according to South China Morning Post and TRT Global.