Need for Technology Regulation Legislation Advocated by Specialist
In a significant development for the global semiconductor industry, Taiwan Semiconductor Manufacturing Company (TSMC) has reported an alleged theft of sensitive trade secrets related to its advanced 2-nanometer technology.
The leak was discovered during internal monitoring by TSMC, leading to swift action and arrests of three current and former employees. The case is currently under investigation by the prosecutors, with search and arrest operations conducted from July 25 to 28.
The alleged leak is of great concern for the industry and the intelligence community, with production safety, information security, and personnel safety being the primary concerns. The incident has prompted calls for stronger measures to protect sensitive technology against unauthorized access and leaks.
Institute for National Defense and Security Research director Su Tzu-yun has recommended drafting a sensitive technology protection law in response to the alleged leak. Su emphasizes the importance of mutual trust between Taiwan and other nations in the context of the semiconductor industry.
Su also suggests that Taiwan could reference measures taken by democratic nations to protect technology. For instance, the security department in universities in the US and Japan mandates academics to ensure their devices contain no personal data when traveling to specific nations or regions.
The potential concern is that engineers and management personnel could be bribed or pressured by China or competing companies to leak sensitive documents or information. The alleged leak involves national core technology, according to TSMC's investigation.
The US investigation into the semiconductor market under Section 232 of the US Trade Expansion Act of 1962 could potentially lead to tariffs on semiconductors. This adds another layer of complexity to the global semiconductor industry, with geopolitical implications.
In response to such threats, democratic nations protect sensitive semiconductor technology through a combination of strict internal security, legal enforcement, industry collaboration, and cybersecurity frameworks.
TSMC has implemented stronger internal controls, such as tighter personnel monitoring and zero-tolerance policies for trade secret violations, following the major leak. The company cooperated fully with authorities, resulting in firings and arrests.
Routine monitoring and reporting are also crucial in catching insider breaches early. TSMC detected the leak through ongoing routine monitoring, highlighting the importance of continuous surveillance within organizations.
Industry-wide cybersecurity collaboration is another key aspect. Democratic nations and companies participate in initiatives like the Semiconductor Manufacturing Cybersecurity Consortium (SMCC), which develops unified cybersecurity assessment standards, aligns with global regulations, and enhances supply chain security to combat cyberattacks and insider threats.
Analysts urge Taiwan to strengthen both legal protections and national security policies targeting espionage risks. This includes harsher penalties for industrial espionage, mandatory security clearances, and export controls to manage risks from illicit pressure or bribery.
In response to sophisticated state-sponsored attacks, Taiwan and allied democratic countries bolster digital defenses, threat intelligence sharing, and rapid response capabilities to counter coercion and infiltration attempts.
The semiconductor manufacturing industry is critical for both digital economies and advanced military capabilities. Su, the director of Institute for National Defense and Security Research, emphasizes this importance, stating that the case is crucial for global politics.
Together, these measures reflect a comprehensive approach in democratic countries to secure semiconductor technology through a coordinated mix of robust internal controls, legal enforcement, collective industry cybersecurity efforts, and national security strategies to mitigate risks of unauthorized access arising from corruption, bribery, or coercion. Taiwan’s experience illustrates the critical blend of corporate diligence and governmental support needed for safeguarding advanced technology sectors.
- The ongoing investigation into the alleged theft of sensitive trade secrets at TSMC highlights the intersection of cybersecurity, technology, and crime-and-justice, with concerns about information security and national core technology protection rising in the semiconductor industry and the intelligence community.
- To address the growing risks of industrial espionage and cyberattacks, Taiwan is more inclined towards enacting stronger legal protections and national security policies, such as drafting a sensitive technology protection law, implementing harsher penalties for industrial espionage, and strengthening digital defenses, in line with the strategies adopted by democratic nations to secure semiconductor technology.
