Taiwan Targets Tokyo Electron & Intel Under Sweeping New Security Laws
Taiwan's regulators just put two tech titans in the crosshairs. The island's latest security legislation is now being tested on the operations of semiconductor equipment giant Tokyo Electron and chip behemoth Intel.
The New Regulatory Front
Forget trade wars—this is about operational scrutiny. The laws grant authorities broad power to examine everything from data flows to supply chain dependencies. It's a defensive pivot, signaling that tech infrastructure is now treated with the same gravity as military assets.
Why These Two?
Tokyo Electron sits at the heart of the global chipmaking machine. Intel's ambitions stretch from design to cutting-edge fabrication. Their combined footprint makes them a logical stress test for the new rules. The probe isn't about accusations—it's about setting a precedent for how foreign tech giants operate on sensitive ground.
The Ripple Effect
This isn't contained to Taipei. Watch for other governments to borrow pages from this playbook, turning tech policy into a tool of sovereignty. For companies, it adds another layer of geopolitical calculus to every expansion plan and partnership.
The move is a stark reminder that in today's world, the most critical infrastructure isn't made of concrete and steel—it's made of silicon and code. And as for the finance crowd already pricing in the 'geopolitical risk premium'? They'll find a way to short stability and long volatility, as usual.
Taiwan probes allies after fears over shifting US politics
Legal and industry voices in Taiwan said they were glad authorities were finally taking these threats seriously because TSMC’s technology keeps the island central in the global economy.
TSMC is still the world’s biggest chipmaker and the main source of the most advanced chips used everywhere, from data centers to AI servers. But the surprise came from the direction of the investigations.
China has long been labeled the main source of technology theft, yet these early cases point to Tokyo Electron, which supplies chip tools, and Intel, which buys TSMC chips and also competes with it.
People in Taipei said the timing was linked to worries about the strength of the island’s main security partner, the US. Officials have been on edge after Donald TRUMP said he wanted a “deal” with China and claimed Taiwan had been “stealing” US chip business while depending on American defense support.
One Taiwanese chip executive working in the US allegedly said the situation felt like a “man bites dog” moment because the probes hit companies that do not fit the usual threat story. Taipei’s actions could also place its geopolitical ties at risk, and it really cannot afford to provoke Trump right now. Not while they still need protection against the long arm of Xi Jinping.
Investigators pursue cases as political tension rises
TSMC, under pressure from the Trump administration earlier this year, boosted its US investment plan from $65bn to $165bn. Even then, US officials said they want half of all chip production built on US soil, far beyond what TSMC can deliver.
In August, Washington agreed to buy a 10% stake in Intel in a move to rebuild the struggling American firm into a national champion.
Prosecutors have not accused Intel of wrongdoing and said the investigation is only about Lo. But analysts said Washington could still push Taipei if the case becomes uncomfortable for US interests.
James Chen, a professor at Tamkang University in Taipei, said Taiwan has “very limited options to refuse US requests and pressure” because it is trying to cut Washington’s 20% tariff on Taiwanese exports and secure support for President Lai Ching-te as he takes a stronger line against China.
The 2022 rules that created this legal framework were designed to stop leaks of “national CORE critical technology,” especially to China.
Taiwan has seen engineers move to Chinese chipmakers for years, including Liang Mong-song, who joined SMIC in 2017 and is now co-CEO. He and others who left TSMC helped SMIC close parts of its technology gap.
The updated law carries bigger fines for leaks to China than to partners like Japan or the US. Even so, experts said it still misses parts of what the government wanted.
Former president Tsai Ing-wen once pushed for broad powers allowing the state to initiate cases itself. Parliament instead passed a version similar to the US Economic Espionage Act. That means prosecutors can only act when a Taiwanese company files a complaint.
Investigators now must build strong cases.
In the Tokyo Electron matter, prosecutors have already charged former TSMC workers for stealing technology, but the charge against the company only says it failed to stop the behavior. Jeremy Chang, who leads an institute under Taiwan’s tech ministry, said the case sets a clear rule that companies must build tighter compliance programs.
Tokyo Electron said the indictment does not say it told anyone to steal technology and promised to improve its controls. Intel said it does not allow its teams to use outside technology and saw no reason to think the claims against Lo had merit.
Observers said political pressure could appear behind the scenes as Taipei focuses on keeping US support.
Chen said, “The government might have some thoughts of intervening or using leverage, but they cannot directly intervene in the judicial system.” He added that the matter is now “very politicised and sensitive.”
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