Taiwan Semiconductor Manufacturing Company (TSMC) filed a lawsuit Tuesday against a former senior vice president, alleging the unauthorized leaking of “confidential information” to Intel.
The legal action centers around Wei-Jen Lo, who TSMC says joined Intel after a 21-year tenure with the company, departing in July. According to TSMC’s official statement, the lawsuit cites Lo’s employment contract, non-compete agreement, and relevant legal statutes, including the Trade Secrets Act.
“There is a high probability that Lo uses, leaks, discloses, delivers, or transfers TSMC’s trade secrets and confidential information to Intel,” the statement asserts, raising concerns about the potential compromise of strategically vital proprietary data.
The news impacted TSMC’s stock, with shares declining over 3% in Tuesday’s trading session.
The lawsuit follows earlier reports indicating the possibility of Lo transferring TSMC’s technology data to Intel. Taiwan’s High Prosecutors Office has launched an investigation into the allegations, adding another layer of scrutiny to the situation.
Intel CEO Lip-Bu Tan addressed the issue last week, stating that his “company respects intellectual property rights” and dismissing suggestions of any misconduct. This statement attempts to mitigate potential reputational damage and reassure investors. However, the unfolding legal battle raises critical questions about the increasingly competitive landscape of the semiconductor industry and the lengths to which companies may go to gain a competitive advantage. The allegations also highlight the importance of robust internal controls and intellectual property protection measures within highly innovative companies like TSMC. The broader strategic implications involve potential disruptions to the delicate balance of power in the global chip manufacturing market if trade secrets were indeed compromised and utilized by a competitor.
Intel’s stock price saw a softer movement, dipping 1.5% lower in mid-morning trading.
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