[News] TEL Fined $5M in TSMC Trade Secrets Case; Former China Executive Left Over Links to Chinese Chip Tool Startups

After being implicated in a 2nm-related trade secrets case involving TSMC engineers, Japanese semiconductor equipment giant Tokyo Electron was also caught up in a separate controversy tied to a Chinese chip tool start-up. According to the Financial Times, Jay Chen—formerly a key figure in its China operations—left the company after it discovered his links to investment vehicles backing emerging Chinese rivals.

The Financial Times, citing corporate records and people familiar with the matter, reports that Chen departed after Tokyo Electron discovered family-linked investment ties to several Chinese start-ups, including one that reportedly moved from servicing its tools to developing competing chipmaking equipment.

According to the report, the company said it became aware of his family-linked investment activities in autumn 2024. He was reportedly removed from his post in February 2025, but remained on as a special adviser until his contract expired in September that year.

This is consistent with Tokyo Electron’s announcement in early 2025, which stated that Jay Chen was reassigned effective March 1, 2025. He moved from Vice President & General Manager of Tokyo Electron Ltd., as well as president roles at its Shanghai and Kunshan units, to Senior Advisor at Tokyo Electron (Shanghai) Ltd.

China Chip Tool Startups Under Scrutiny

Notably, corporate filings cited in the Financial Times report show that an investment partnership involving Chen’s wife, Takako Ohtori, was among the founding shareholders of Suzhou WST Semiconductor Technology. The controversy centers on the fact that, while still serving as a supplier to Tokyo Electron, WST later moved into developing its own chipmaking tools—including track systems, a segment where TEL holds about 90% of the global market, the report adds.

According to WST’s website, the company supplies wet process tools, wafer handling systems, EFEM modules, robots, and related consumables. Regulatory filings cited by the Financial Times show WST began developing a prototype clean track system in 2022, now under internal testing and designed for compatibility with mainstream tools. The company is also said to acquire used track equipment, refurbish it, and resell it in China.

The report also highlights Chinese chip equipment maker Britech Semiconductor Equipment, noting that Chen was a co-founder. Its largest shareholder, BMJ Holding Limited, is registered under his wife, Ohtori, while Chen is also believed to hold an indirect stake, the report suggests.

TSMC Trade Secrets Case: Tokyo Electron Unit Fined, Defendants Jailed

On the other hand, Reuters also reports on Monday that a Taiwan court fined the local unit of Tokyo Electron NT$150 million (about $5 million) in a trade secrets case, while sentencing five defendants to prison terms of up to 10 years over the alleged theft of sensitive chip technology from foundry leader TSMC.

As explained by the report, in August 2025, prosecutors indicted Chen Li-ming, a former employee of both TSMC and Tokyo Electron, along with other defendants, for allegedly unlawfully obtaining trade secrets in an attempt to help Tokyo Electron secure additional equipment orders from TSMC.

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(Photo credit: Tokyo Electron)