Shares of giant chip foundry Taiwan Semiconductor Manufacturing Company (TSMC) (TSM) remained largely unchanged early Thursday. This comes as Taiwanese prosecutors revealed that they raided two homes of TSMC’s former senior executive over allegations of a trade secret leak to U.S.-based chipmaker Intel (INTC).
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TSMC Drags Ex-Senior Executive to Court
TSMC, the world’s biggest contract chip manufacturer and a key partner to top chip designer Nvidia (NVDA), disclosed on Tuesday that it has filed a lawsuit against Wei-Jen Lo, its ex-senior vice president for corporate strategy development. The chip foundry claimed there is “a high probability that Lo uses, leaks, or discloses” its trade secret to Intel.
Lo had emerged from his June retirement to join Intel as the new head of research and development. The 75-year-old executive, who worked at TSMC for 21 years, served Intel for 18 years before joining the Taiwanese company.
According to prosecutors, Lo is suspected of breaching Taiwan’s National Security Act. During the raid, investigators confiscated computers, USB drives, and other evidence belonging to the new Intel executive.
The prosecutors in a statement also noted that a Taiwanese court has sanctioned a request to seize Lo’s shares and real estate investments in the country.
Intel Restates Respect for IP
Meanwhile, Intel on Thursday continued to emphasize that it respects other businesses’ intellectual property and that there is no merit to TSMC’s allegations.
The U.S. chipmaker noted that Lo’s onboarding is “no different” from the regular executive moves that are “a common and healthy” part of the semiconductor industry.
The tussle between both companies comes at a time when Taiwan is working to avoid any imposition of harsh tariffs on the country’s semiconductor industry by President Donald Trump’s administration.
Is TSM a Buy or Hold?
On Wall Street, Taiwan Semiconductor’s shares currently have a Strong Buy consensus rating. This is based on eight Buys and one Hold issued by nine analysts over the last three months.
Moreover, the average TSM price target of $348.25 implies more than 20% growth potential from the current levels.
