TSMC’s Legal Move Signals Intensifying Chip Manufacturing Battle

In a dramatic escalation of the semiconductor competition, Taiwan Semiconductor Manufacturing Company (TSMC) has initiated legal proceedings against a former senior executive accused of sharing critical trade secrets with Intel. The lawsuit, filed with Taiwan's Intellectual Property Court, targets Wei-Jen Lo, who recently joined Intel's leadership team after serving as TSMC's Senior Vice President.

Rather than triggering investor concern, TSMC's stock surged nearly 3% on the Taiwan exchange following the legal announcement. The positive market response reflects concurrent reports of the company's massive $28 billion investment plan. This substantial capital expenditure, equivalent to approximately 900 billion NT dollars, will fund three additional fabrication plants in Taiwan dedicated to 2-nanometer chip production.

The timing of these developments highlights TSMC's dual-pronged strategy: aggressively protecting intellectual property while accelerating manufacturing capacity expansion. The company appears determined to maintain its technological leadership despite increasing industry competition and geopolitical considerations.

Advanced Technology at Center of Dispute

TSMC's legal filing indicates "high probability" that confidential information regarding their cutting-edge A16 and 2-nanometer manufacturing processes may have been compromised. This case emerges as Intel aggressively pursues catching up in the foundry business, where TSMC currently maintains significant technological advantages.

Should investors sell immediately? Or is it worth buying TSMC?

The semiconductor industry is experiencing a "winner-takes-most" dynamic, largely driven by insatiable demand for AI chips from major technology firms including Nvidia and Apple. TSMC's decision to double down on domestic manufacturing capacity demonstrates confidence in its production efficiency and technological roadmap.

Market Confidence Remains Strong

Investors have rewarded TSMC's operational execution with shares gaining over 40% during the past twelve months. Since the beginning of the current year, the stock has advanced more than 25%, maintaining a consistent upward trajectory that reflects market approval of the company's strategic direction.

While the legal confrontation with Intel may generate headline risks in the short term, market participants appear focused on TSMC's ability to maintain its production schedule for 2-nanometer mass production, scheduled for late 2025. Successful execution of this timeline would likely render the current legal dispute a minor footnote in the company's continued growth story.

The simultaneous announcement of legal action and massive capital investment underscores TSMC's determination to defend its market position through both legal channels and operational superiority.