Only days after Microsoft (MSFT) faced a security breach tied to its SharePoint software, Taiwan Semiconductor Manufacturing Company (TSM) is now dealing with a similar challenge of its own. The world’s largest contract chipmaker has found itself dealing with a serious security breach involving its cutting-edge 2-nanometer chip technology. The issue came to light during regular internal checks, when the company’s monitoring systems spotted unusual activity.
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From there, the investigation quickly uncovered that nine employees had been using mobile phones to take and share sensitive data. Three of them worked in trial production and six in research and development. The information, according to the company, ended up with staff at Tokyo Electron (TOELY), a major supplier of semiconductor equipment.
As a result, Taiwan Semiconductor Manufacturing Company wasted no time taking action. All nine employees were let go, and legal proceedings are now underway. The case is currently under judicial review in Taiwan. The company stressed it has a zero-tolerance policy for anything that could put its trade secrets or business interests at risk. On top of that, it has already rolled out stronger internal security measures to prevent anything similar from happening again.
High Stakes in the Race for Next‑Gen Chips
This situation also falls under Taiwan’s National Security Act, which was updated in 2022. The law treats “National Core Critical Technologies” with extra protection, meaning violations can lead to serious criminal penalties. However, the company has not disclosed the full extent of the breach or whether any leaked data reached competitors.
The 2-nanometer process at the heart of this case is among the most advanced in the industry. Only a few players, including Taiwan Semiconductor Manufacturing Company, Samsung (GB:SMSN), Intel (INTC), and Japan’s Rapidus, are working on chips at this level. The company is aiming to begin mass production in the second half of 2025. All of this is playing out as competition in the global chip market heats up. Advanced chips power everything from smartphones to AI systems, and demand is only growing. With that in mind, chipmakers are spending billions to stay ahead.
For Taiwan Semiconductor Manufacturing Company, which counts Apple (AAPL), Nvidia (NVDA), and Qualcomm (QCOM) among its top clients, the breach is a reminder of just how high the stakes are in protecting intellectual property while racing to deliver the next big leap in chip performance.
Is TSM Stock a Buy?
On the Street, TSMC boasts a Strong Buy consensus rating, with an average TSM stock price target of $267.57. This implies an 11.95% upside from the current price.
