Giant chip foundry Taiwan Semiconductor Manufacturing Company (TSMC) (TSM) has dragged Wei-Jen Lo, its former top executive, to court over a possible trade secret leak to new employer Intel (INTC). TSM fell about 1% early Tuesday while INTC rose almost 2%.
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The legal action is the latest development in the tussle between the two semiconductor companies over Intel’s onboarding of Lo as its new head of research and development. TSMC said Lo had signed a non-compete agreement.
TSMC Worries over Trade Secrets Spill
Seventy-five-year-old Lo worked at TSMC — the world’s biggest contract chip manufacturer — for 21 years. Until June, Lo was the Taipei firm’s senior vice president of corporate strategy development.
At a point in his career at TSMC, the senior executive — who retired earlier this year — also spearheaded TSMC’s research and technology development, including the semiconductor company’s production of advanced chips.
TSMC, in a statement, noted that “there is a high probability that Lo uses, leaks, discloses, or transfers TSMC’s trade secrets and confidential information to Intel.” However, Lip-Bu Tan, Intel’s chief executive, has previously dismissed claims of trade secrets disclosure, noting that the American company respects intellectual property rights.
Semiconductor in View in U.S.-Taiwan Trade Talks
The development comes amid ongoing trade negotiations between the U.S. and Taiwan, with the latter seeking to avoid harsh tariffs on its semiconductor industry.
President Donald Trump’s administration has imposed a 20% tariff on most Taiwanese exports — exempting semiconductors. This is even as the U.S. seeks to ramp up domestic production of the technology and recently took a stake in Intel.
TSMC Maintains Global Semiconductor Lead
TSMC remains a key player in the global semiconductor industry and is expected to achieve a 5% compound annual growth rate in its supply operations between this year and 2027, according to BofA analyst Mike Yang.
The Taiwanese company, which manufactures chips designed by companies such as Nvidia (NVDA), recently revealed its planned AI-powered software chip design. The design is expected to help resolve the high-energy dilemma that continues to haunt the production of powerful AI chips.
Is TSM a Buy or Hold?
On Wall Street, Taiwan Semiconductor’s shares currently have a Strong Buy consensus rating based on eight Buys and one Hold issued by nine analysts over the past three months.
Moreover, the average TSM price target of $348.25 implies more than 22% upside potential.
