By ByteBot
Taiwan prosecutors raided the homes of former TSMC executive Lo Wei-jen on November 27, 2025—just 48 hours after TSMC sued him for allegedly taking 2nm chip secrets to Intel. Moreover, prosecutors seized computers and USB drives, froze his assets, and invoked Taiwan’s National Security Act. This marks the first time the 2022 law has been used for semiconductor trade secrets. Consequently, Taiwan signals it treats chip technology mobility as a national security threat even when the “poacher” is US ally Intel.
The 48-Hour Escalation: Civil to Criminal in Two Days
TSMC filed a civil lawsuit Tuesday, November 25. By Thursday, Taiwan prosecutors had raided Lo’s Taipei and Hsinchu residences, seized digital devices, and frozen his stocks and real estate. The speed is brutal: civil IP dispute to criminal investigation with asset seizures in 48 hours. Furthermore, prosecutors didn’t just invoke the Trade Secrets Act (10-year maximum sentence)—they escalated to the National Security Act, which carries 12 years imprisonment and fines up to $3.5 million.
This is the first National Security Act case for semiconductors since Taiwan tightened the law in 2022. The Act classifies sub-14nm chip manufacturing as “national core critical technology,” and Taiwan law explicitly forbids producing 2nm chips outside the country. Additionally, the message is clear: if you worked on cutting-edge nodes at TSMC, Taiwan considers your knowledge state property.
What’s at Stake: Lo’s Two Decades of 2nm Knowledge
Lo Wei-jen isn’t just any engineer. At 75, he was TSMC’s longest-serving executive with 21 years (2004-2025) leading development of 5nm, 3nm, and 2nm chips. He received the “TSMC Medal of Honor” from founder Morris Chang in 2011 for a high-risk decision on 28nm technology. Indeed, his teams secured over 1,500 global patents and drove EUV lithography—the critical manufacturing process behind advanced nodes.
According to TSMC’s lawsuit, Lo allegedly used his authority before retiring in July to have subordinates photocopy sensitive 2nm, A16, and A14 process documents. These aren’t incremental improvements—they represent 5+ years of R&D advantage over competitors. In fact, Taiwan’s Minister of Economic Affairs confirmed that “TSMC cannot produce 2nm chips overseas currently” due to technology protection regulations. If Lo shared this with Intel, he didn’t just violate a non-compete—he potentially handed over strategic national assets.
Lo joined Intel as VP of R&D in October 2025 without disclosing the move to TSMC, violating his non-compete agreement. Intel likely knew the risk and hired him anyway.
Intel’s Desperation: Why Risk a Trade Secrets War?
Intel is billions of dollars behind TSMC in advanced manufacturing, and hiring Lo was a calculated bet to accelerate its struggling 18A node. However, Intel’s 18A yields sit at 55-65%—well below the 80-90% threshold for mass production. The company posted a $2.3 billion operating loss in Q1 2025 from its foundry business. Meanwhile, TSMC controls 64.9% of the global foundry market and is the only company mass-producing 3nm chips commercially.
Intel’s 18A node features RibbonFET and PowerVia technologies that claim 15% performance-per-watt gains, but yields remain too low and major fabless clients like Qualcomm still favor TSMC. Citi analysts maintain Intel is “far behind TSMC technologically” despite some advantages like backside power delivery. Therefore, hiring a “TSMC superhero” with two decades of cutting-edge knowledge wasn’t just smart—it was Intel’s fastest path to catching up. The legal risk was worth it.
Taiwan Prosecuting a US Ally, Not Just China
Taiwan has aggressively prosecuted Chinese companies for poaching talent. In March 2025, prosecutors investigated SMIC (China’s biggest chipmaker) for “illegally poaching” Taiwanese engineers, searching 34 locations and questioning 90 people. Notably, over 3,000 Taiwanese semiconductor engineers moved to China by 2019—10% of Taiwan’s R&D workforce—lured by salaries 3-5x higher than domestic rates.
But prosecuting Intel is different. Intel is a US company, and the US is Taiwan’s primary security partner. This case tests the boundaries of that alliance: when strategic technology is at stake, semiconductor sovereignty trumps geopolitical alignment. As a result, Taiwan’s stance is that TSMC is a “strategic national asset,” and protecting its technology matters more than accommodating an ally’s competitive needs. The enforcement against Intel is as aggressive as against China—same playbook, same speed, same national security invocation.
Market Shrugs: TSMC Flat, Intel Up
Markets barely reacted. TSMC stock fell 0.78% on November 25 and traded “almost flat” on November 27 despite the raids. Conversely, Intel stock, paradoxically, rose 2% on November 25 and climbed 3% to $37.00 on November 26. Analysts maintain a Strong Buy rating on TSMC with a target of $348.25 (22% upside). Intel’s stock is up 103% year-to-date despite foundry losses—investors are betting on a turnaround.
Intel denied the allegations on November 27, claiming Lo hasn’t leaked trade secrets. The market sees this as a “potential overhang but not thesis-breaker.” Nevertheless, legal cases drag for years, and immediate business impact is limited. Intel’s willingness to fight publicly rather than settle quietly signals confidence—or stubbornness.
Key Takeaways
- 48-hour escalation from civil lawsuit to criminal raids shows Taiwan’s urgency. National Security Act invoked for first time on semiconductor case.
- Lo’s 21 years of 2nm, 3nm, 5nm knowledge is what’s at stake. Taiwan law forbids producing 2nm chips outside the country—this is state property, not just corporate IP.
- Intel’s $2.3B foundry losses and 55-65% 18A yields explain why hiring Lo was worth the legal risk. Desperate companies take desperate measures.
- Taiwan prosecutes US ally as aggressively as China. Semiconductor sovereignty > geopolitical alliances when cutting-edge tech is threatened.
- Executive mobility in chips is now criminalized. Lo faces 12 years imprisonment if convicted. The talent war just became a legal war.
