Taiwan has arrested six individuals in a major national security probe after chipmaking giant TSMC reported a suspected leak of proprietary 2-nanometer chip technology – the company’s most advanced semiconductor process to date.

According to Taiwan’s High Prosecutors Office, former and current employees of Taiwan Semiconductor Manufacturing Co. are suspected of illegally accessing and attempting to obtain critical trade secrets.

Authorities conducted searches of multiple residences and company premises between July 25 and July 28, with three individuals still in custody.

TSMC confirmed it had detected the breach through internal monitoring and immediately took disciplinary action and launched legal proceedings.

The company said it identified the issue early and remains committed to protecting its intellectual property.

The incident is being investigated under Taiwan’s National Security Act, which was amended in 2022 to classify certain chipmaking technologies, such as sub-14nm processes, as “national core critical technologies”.

The 2nm node, which TSMC plans to mass produce later this year, is considered a global benchmark in semiconductor advancement.

The breach comes as global competition in chip development intensifies, with TSMC, Samsung and Intel locked in a race to dominate next-generation silicon.

TSMC, which supplies Apple, Nvidia and other tech heavyweights, currently produces more than 90% of the world’s most advanced chips.

Local media reported that Japanese chip equipment supplier Tokyo Electron’s Taiwan offices were also searched as part of the probe, though the company declined to comment.

This is the first major technology theft case investigated under Taiwan’s updated national security laws.

Prosecutors said there is strong suspicion that trade secrets were acquired in collusion between current and former TSMC engineers. They are investigating whether any of the stolen data was passed to third parties.