When 3-Nanometer Technology Meets Talent Mobility: Why Did TSMC Sue a Former Executive?

In the semiconductor industry, there is a widely quoted saying:

"You can buy equipment and poach talent, but you may not necessarily be able to manufacture advanced chips."

The reason is simple. Chip manufacturing has never been a business that can be replicated from blueprints alone. The knowledge hidden behind production processes, process parameters, and R&D experience often requires thousands of engineers and decades of sustained investment to build.

That is precisely why, when a senior executive with access to core technology leaves a company, the attention it draws often far exceeds that of an ordinary employee’s job change.

In 2025, global foundry leader TSMC filed a lawsuit in court, accusing former executive Wei‑Jen Lo of breaching confidentiality obligations and allegedly taking important technical information related to advanced process nodes to competitor Intel.

The news quickly attracted widespread attention in the semiconductor industry.

This was not because the case involved huge monetary damages, but because the backdrop of the lawsuit was particularly unusual.

In recent years, as global chip competition has intensified, advanced process technology has become a strategic resource that countries are rushing to deploy. From 5nm to 3nm, and further to the more advanced 2nm process, each technological breakthrough represents massive R&D investment and enormous market advantages.

Against this background, talent holding key technologies naturally becomes one of the scarcest resources.

According to publicly available information, Wei‑Jen Lo had long served in important technical management positions at TSMC, with in‑depth knowledge of advanced process R&D and production systems. After leaving TSMC, he joined Intel, which was then striving to catch up in advanced process technology.

In TSMC’s view, the issue was not just the executive’s departure itself, but whether the technical experience possessed by the relevant person would flow into a competitor’s system along with the talent move.

In fact, in the high‑tech industry, what companies most fear is often not patent imitation.

Patents are at least public.

What is truly difficult to prevent is the knowledge that cannot be fully captured in patent documents.

For example, why a certain process parameter is set in a particular way, how many failed experiments a certain material combination has undergone, or how a particular production step improves yield—these insights often do not appear in public documents, yet they can determine whether a company can achieve a technological breakthrough.

Therefore, more and more tech companies are beginning to regard trade secrets as core assets of equal or even greater importance than patents.

TSMC has long maintained a strict confidentiality system and technical management framework. For personnel in key positions, the company not only imposes confidentiality obligations but also continuously monitors access to and use of core technical information.

Against this backdrop, any talent movement involving advanced process technology inevitably attracts close scrutiny.

From a legal perspective, the crux of such disputes is usually not whether an employee has the right to leave.

In modern commercial society, the free flow of talent is itself protected by law.

The real question is whether, when leaving, the employee takes only personal capabilities or takes the company’s trade secrets as well.

The line between the two may seem clear in theory, but in practice it is often not easy to draw.

The professional experience accumulated by an engineer over many years belongs to personal capability; but a company’s undisclosed technical solutions, process parameters, and R&D data may constitute legally protected trade secrets.

How to strike a balance between talent mobility and trade secret protection has become a common challenge for technology companies worldwide in recent years.

For Chinese companies, the signals from this case are equally worth heeding.

As more and more Chinese enterprises enter fields such as chips, new energy, artificial intelligence, and high‑end manufacturing, their demand for international high‑end talent continues to grow. At the same time, overseas companies are increasingly strengthening their protection of core technologies.

In the past, companies recruiting talent focused more on what technical capabilities the candidate could bring. Today, companies need to pay even more attention to whether the source of those capabilities is compliant.

If a company lacks a sound intellectual property review mechanism, even without any subjective intent to infringe, it may still become entangled in cross‑border litigation because an employee brings trade secrets from a former employer.

In a sense, TSMC’s lawsuit against its former executive is not merely a legal dispute between companies.

It reflects an increasingly evident trend as global technology competition enters a new phase: technological competition ultimately comes down to talent competition, and behind talent competition lies the contest of trade secret protection systems.

When advanced process nodes become the core resource of the global industrial chain, every talent movement may touch the nerves of the entire industry.