TSMC Files Lawsuit Against Intel Over Alleged Trade Secret Theft by Former Executive

Taiwan Semiconductor Manufacturing Company (TSMC), the world's premier semiconductor foundry, has initiated legal proceedings against Intel, accusing the chipmaker of orchestrating the theft of critical trade secrets through the recruitment of a high-ranking former TSMC executive. The lawsuit targets Lo Wei-jen, previously a Senior Vice President at TSMC, alleging he transferred confidential technological information upon joining Intel. This case represents more than a typical corporate departure; it possesses the potential to significantly alter the competitive dynamics between these two industry titans.

On Tuesday, TSMC formally submitted its complaint to the Taiwanese Intellectual Property Court. The legal action outlines several serious allegations, including breach of employment contract, violation of confidentiality agreements, and infringement of Taiwan's Trade Secret Act. Central to the dispute is the claim that Lo provided strategic information to a direct market rival.

The situation is particularly sensitive due to Lo's deep involvement in TSMC's most advanced manufacturing processes. During his 21-year tenure, he played a pivotal role in developing the company's cutting-edge 5-nanometer, 3-nanometer, and 2-nanometer technologies—the very processes that form the foundation of TSMC's technological leadership. His retirement in July 2025 was followed just three months later by his appointment as Executive Vice President at Intel, reporting directly to CEO Lip-Bu Tan.

Suspicious Activities and Broader Recruitment Patterns

TSMC's investigation revealed potentially troubling behavior preceding Lo's departure. According to court documents, the executive continued conducting meetings with research and development staff months after his transfer to the strategic planning division. The company suspects these interactions were used to systematically gather intelligence about ongoing technology initiatives.

This incident appears part of a broader pattern. Industry reports indicate Intel has been aggressively recruiting TSMC engineers in Arizona, offering compensation packages 20% to 30% above TSMC's levels alongside reportedly reduced workloads. Both companies operate advanced fabrication facilities in the state: Intel produces its 18A chips there, while TSMC manufactures wafers for clients including Nvidia's Blackwell processors.

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The geographical proximity has intensified the competition for specialized talent while complicating the protection of proprietary information. Taiwan's Ministry of Economic Affairs has announced it will monitor the case closely and examine whether national security laws might have been violated.

Financial Performance and Strategic Vulnerabilities

Despite these challenges, TSMC continues to demonstrate strong financial performance as a key beneficiary of the artificial intelligence boom. The company serves major technology firms including Nvidia and Apple, and its third-quarter 2025 results exceeded market expectations. TSMC reported earnings per share of $2.92, substantially surpassing the projected $2.59, while revenue surged over 40% to $32.36 billion.

However, the legal dispute highlights that technological superiority alone may no longer guarantee competitive advantage. Protecting intellectual property and retaining key personnel have emerged as critical strategic priorities, particularly as Intel aggressively attempts to reclaim its former manufacturing leadership position.

The court has granted TSMC's request for a preliminary injunction to prevent further actions by Lo and Intel, though the international enforceability of such an order remains uncertain. Intel CEO Lip-Bu Tan has dismissed the allegations as "rumor and speculation," emphasizing his company's respect for intellectual property rights. The case continues to develop as both companies navigate this high-stakes legal and competitive confrontation.