Taiwan’s 32 National Core Key Technologies and the National Security Act | Compliance Lessons from the First Criminal Case

Hello, this is Ryuta Hamamoto from TIMEWELL.

On 27 April 2026, Taiwan’s Intellectual Property and Commercial Court issued a first-instance judgment: a former TSMC employee received 10 years’ imprisonment, and Tokyo Electron’s Taiwan subsidiary was fined NT$150 million (about ¥700 million). Even that one sentence signals a structural shift.

This is the first criminal application of Taiwan’s National Security Act amendments of May 2022, which criminalize extraterritorial use of National Core Key Technology (NCKT) trade secrets and economic espionage, three years after the amendments took shape. Prosecutors framed the case around TSMC 2nm-generation secrets falling within the semiconductor designation “IC process technology at 14nm and below.”

Two lessons stand out for me. First, Taiwan’s economic-security law has a wider practical reach than headlines often imply. Second, that reach sits next to everyday operations of Japanese companies with assignees or subsidiaries in Taiwan. Below I map the 32 items and Article 8 for beginners, walk the first indictment’s public facts, compare U.S. EEA/EAR, EU dual-use rules, and Japan’s Economic Security Promotion Act, and end with five Monday-ready steps.

Neutrality note: I do not label the statute as “anti-China legislation.” The text targets “outside Taiwan” generally. Defendant names are limited to public reporting; facts follow reported court and prosecutorial materials. List designation and criminal outcomes are regulatory and judicial classifications, not moral verdicts on companies or individuals. The first-instance judgment is not final; appeals may change outcomes.

What you will learn

• Structure and designation criteria of Taiwan’s 32 NCKT items across five fields
• Article 8 extraterritorial-use and economic-espionage offenses (5–12 years; fines up to NT$100M; 2–10× illicit gains)
• The August 2025 first indictment (three former/current TSMC engineers + Tokyo Electron Taiwan) and April 2026 first-instance judgment
• Comparative table vs U.S. EEA/EAR, EU dual-use, Japan Economic Security Promotion Act
• Four risk scenarios for Japanese firms and five practical steps

Three terms first

Term	Summary
NCKT	Technologies designated by NSTC whose outflow would seriously harm Taiwan’s security, competitiveness, or growth. 32 items in five fields as of May 2026.
National Security Act Art. 8	Added in the May 2022 amendment: extraterritorial-use and economic-espionage offenses for NCKT trade secrets. Penalties: 5–12 years; fines NT$5M–100M.
Extraterritorial-use offense	Acquiring, using, or disclosing NCKT trade secrets with intent to use them outside Taiwan, including mainland China, Hong Kong, Macau, and all other foreign places. Destination-neutral.

Remember three facts: “14nm and below is in,” “Japan counts as outside Taiwan,” and “upper imprisonment is 12 years.” That third number is the one that tends to silence a room.

1. Structure of the 32 NCKT items

1-1. Wave 1: 22 items (5 December 2023)

Field	Count	Main content
Semiconductors	2	(1) IC process technology at 14nm and below and related critical gases, chemicals, and equipment tech; (2) heterogeneous integration packaging (incl. wafer-level, silicon photonics)
Defense	6	Military carbon-fiber composites, high-temp carbon materials, IFF, multi-mode seekers, active phased-array recon, ramjet tech
Aerospace	8	Satellite buses, payloads, ground control, rocket propulsion, imagery processing, etc.
Information security	3	Crypto modules, post-quantum crypto-related, network intrusion detection/defense
Agriculture	3	Critical breeding, agricultural biochips, facility operations tech

Semiconductors are only two items by count, but they capture two central competition axes: advanced process and advanced packaging. TSMC 3nm/2nm and chiplet/silicon photonics sit inside those designations as a regulatory matter.

1-2. Wave 2: 10 more items (2025)

Publicly discussed additions include:

• Item 29: active cyber defense
• Items 30–32: expanded agricultural breeding, biochips, and facility expert systems
• Media reports also mention quantum / AI / optoelectronic fusion-related technology

Confirm exact numbering and wording in Chinese primary notices. Wave 2 reinforced cyber and agri-bio while keeping the five-field structure.

1-3. Designation criteria and duties

NSTC designates technologies whose outflow would seriously harm Taiwan’s security, industrial competitiveness, or economic development. From the notice date, holders face duties on personnel management (hire, transfer, exit), information management (access, logs, encryption), overseas travel/contact reporting, and foreign capital/JV reporting.

This is a hybrid of list-style export control and people/information internal control. A Taiwan-specific coloring compared with pure EAR list control.

2. Article 8: extraterritorial use and economic espionage

2-1. Core of the May 2022 amendment

Offense	Elements	Penalty
Extraterritorial use of NCKT trade secrets	Unlawful acquisition/use/disclosure with intent to use outside Taiwan (mainland China, HK, Macau, and other foreign places)	5–12 years; fine NT$5M–100M
Economic espionage	Acquisition/use/disclosure for foreign powers, mainland China, HK, Macau, hostile external forces, or organizations under their effective control	5–12 years; fine NT$5M–100M

Fines can climb further via 2–10× illicit gains. Attempts are punishable. Jurisdiction concentrates in the IP and Commercial Court.

2-2. Three-layer trade-secret protection

Law	Target	Imprisonment
Trade Secrets Act Art. 13-1	Ordinary trade-secret infringement	Up to 5 years
Trade Secrets Act Art. 13-2	Extraterritorial use of trade secrets	1–10 years
National Security Act Art. 8	NCKT extraterritorial use / economic espionage	5–12 years

NCKT designation can jump the lower bound by several years for the same secret-type conduct.

2-3. What “outside Taiwan” means

“Outside Taiwan” includes mainland China, Hong Kong, Macau, and every other foreign place. Japan, the U.S., and the EU included. Reading Article 8 as mainland-only is inaccurate. Legislative history discussed mainland outflow as a major concern. Text and enforcement are destination-neutral.

That point is why the first indictment matters: the outflow path involved a Japanese group’s Taiwan subsidiary, and Article 8 still applied.

3. First criminal case (Aug 2025) and first-instance judgment (Apr 2026)

3-1. Timeline

Date	Event
8 Jul 2025	TSMC internal monitoring detects anomaly; reports to authorities
25–28 Jul 2025	Searches and detentions
5 Aug 2025	Court orders detention of three persons
27 Aug 2025	Prosecution under National Security Act and Trade Secrets Act (first application)
Dec 2025	Corporate indictment of Tokyo Electron Taiwan; prosecution seeks NT$120M fine
27 Apr 2026	IP and Commercial Court first-instance judgment

3-2. Defendants and first-instance outcomes

Defendant	Role	First-instance outcome
Chen Li-ming	Former TSMC employee; later marketing at Tokyo Electron Taiwan	10 years’ imprisonment
Wu Bing-jun	Then-current TSMC engineer	9-year request (judgment details separately reported)
Ge Yi-ping	Then-current TSMC engineer	7-year request (judgment details separately reported)
Tokyo Electron Taiwan (corporate)	Equipment supplier subsidiary	Fine NT$150M (~¥700M)

Prosecution sought NT$120M against the corporation; the court imposed NT$150M, consistent with the illicit-gains multiplier design.

3-3. Alleged core facts

Prosecutors alleged that after leaving TSMC, Chen asked two still-employed engineer colleagues to photograph/copy 2nm process documents and related gas/chemical/equipment information, aiming to improve etch-tool performance and win placement on TSMC’s 2nm line. Article 8 was central. 2nm falls within “14nm and below” process technology.

These are alleged and adjudicated facts at first instance, not moral characterizations of the companies as a whole. Corporate liability for employee conduct is a compliance design lesson, not a brief against any particular brand.

3-4. Four operational messages

1. Destination involving a Japanese-group entity does not block National Security Act application. Destination-neutral text works in practice.
2. Corporate entities can be indicted and fined independently of natural persons. Material for group compliance.
3. Mid-career mobility is a central risk scenario. Former employees accessing prior-employer secrets after joining a new employer.
4. Courts signal heavy deterrence. 10 years is near the 5–12 year top of the range.

4. Comparison with major foreign frameworks

Regime	Jurisdiction	Core law	Protects	Extraterritoriality	Main penalties
NCKT	Taiwan	National Security Act (2022)	32 designated tech trade secrets	Outflow outside Taiwan	5–12 years; up to NT$100M; 2–10× gains
EEA	U.S.	18 U.S.C. §1831/1832	Trade secrets for foreign governments/orgs	Can reach conduct outside U.S.	Individuals up to 15 years; entities up to $10M
ECRA / EAR	U.S.	ECRA 2018, EAR	Dual-use items/tech	Reexport / deemed export	Civil up to $300k/count; criminal up to 20 years
EU dual-use	EU	Reg. (EU) 2021/821	Annex I items/tech	Export/brokering licensing	Member-state law (often up to ~10 years)
Economic Security Promotion Act	Japan	2022 Act	Specified critical tech / infrastructure	Domestic notification regimes	Fines / business orders (imprisonment limited)

Taiwan’s distinct features

1. Hybrid of trade-secret crime and export-control thinking
2. “Intent to use outside Taiwan” can complete the offense before goods cross a border
3. Active corporate punishment, shown in this first case as enforcement posture, not as a judgment of corporate “good or bad.” First-instance only. Appellate review remains.

Practical difference for Japanese companies

EAR/FEFTA start with classification and licensing. Taiwan Article 8 criminalizes unlawful trade-secret acquisition itself, so contractual permission alone may not defeat liability. Compliance must reach HR, information security, and leaver management, not only export shipping desks.

5. Four risk scenarios and five Monday steps

Sectors most affected

Semiconductor equipment (front- and back-end), materials (specialty gases, chemicals, resists), EDA/IP, fabless foundry customers, defense materials, aerospace, plus nearly any Japanese firm with Taiwan people, subsidiaries, JVs, or Taiwan suppliers.

Four typical scenarios

1. Taiwan subsidiary staff send customer secrets to HQ/other sites (even routine tech support if the content is NCKT).
2. Assignees bring residual data home on laptops/phones at repatriation.
3. Mid-career hires from Taiwan firms introduce prior-employer secrets: corporate liability risk for the hiring entity.
4. JV/co-development sharing that is contractually allowed may still need separate NCKT permissions/filings.

Five Monday-ready steps

Step	Content
STEP1	Inventory Taiwan-handled tech/received information vs 32 NCKT items. In semiconductors, first sort on “14nm and below” and “heterogeneous integration.”
STEP2	For NCKT-relevant data, allow Taiwan-in-region access only; block storage/transmission to overseas servers (DLP/IRM settings).
STEP3	Re-audit Taiwan leaver management: non-competes, confidentiality, device/cloud forensics, competitor-move monitoring.
STEP4	Clean-hire attestations: ban prior-employer secret imports; design onboarding work instructions so early tasks do not force contact with former tech.
STEP5	Local Taiwan counsel retainer, whistleblower channel, annual training, and search/seizure escalation playbooks.

These are general group-compliance checks, not arguments about any single defendant company.

FAQ

Q1. Is every tech transfer from a Taiwan subsidiary to Japan HQ illegal?
No. Non-NCKT ordinary technical information falls outside Article 8 (though ordinary Trade Secrets Act extraterritorial-use rules may still apply). For NCKT content, need explicit owner permission and a lawful business purpose.

Q2. Is this “anti-China legislation”?
Legislative history discussed mainland outflow as a major concern, but the text is destination-neutral. The first indictment involved a Japanese-group path. We describe it as economic-security core-tech protection.

Q3. If a hired Taiwan engineer brings prior secrets, is the employer punished?
Corporate supervisory liability is possible. This case treated the corporate entity as an indicted/fined subject. Clean-hire covenants and early-assignment design matter.

Q4. We have historical 14nm experience in Japan. Are we covered?
NCKT protects outflow of technology held by Taiwan entities/researchers. Your independently held Japanese process IP is not itself designated. Handling customer-provided Taiwan tech can still trigger the Act.

Q5. Was Tokyo Electron’s Japan parent indicted?
As of May 2026, indictment targets were Tokyo Electron Taiwan (corporate) and three natural persons, not the Japan parent. It remains a group-level compliance incident requiring HQ response.

Q6. Where is the 32-item list?
NSTC notices: wave 1 on 5 Dec 2023; wave 2 in 2025. Use Chinese primary texts for formal names.

Q7. How are fines calculated?
Natural-person range NT$5M–100M; if illicit gains exceed the cap, 2–10× gains can apply. Corporates face parallel fine structures. This case imposed NT$150M on Tokyo Electron Taiwan.

Latest developments as of July 2026

Taiwan’s NCKT is about fencing core technology; Japan is moving on related institutional tracks. JFIC launched 29 June 2026 and the amended FEFTA was promulgated 5 June 2026 (MOF inbound FDI). Approaches differ (criminal trade-secret fencing vs investment-screening gates). The Japan–India summit on 2 July 2026 also advanced semiconductor/critical-minerals economic-security language (Prime Minister’s Office of Japan). Read Taiwan cases alongside peer frameworks; see Japan–India Summit 2026 and economic security. Operations remain fluid. Avoid over-certainty.

If you want to improve export-control operations or classification efficiency, review the TRAFEED service catalog (PDF) or contact us.

Key takeaways

Taiwan’s 2022 National Security Act amendments created extraterritorial-use and economic-espionage offenses for NCKT trade secrets. NCKT spans five fields and 32 items as of May 2026. Semiconductors include 14nm-and-below process and heterogeneous integration. Penalties: 5–12 years; up to NT$100M; 2–10× illicit gains.

First application: Aug 2025 indictment; Apr 2026 first-instance 10 years for the lead individual and NT$150M corporate fine (first instance; appeals may change outcomes). “Outside Taiwan” includes Japan, the U.S., and the EU. Destination-neutral. “Anti-China legislation” is not a precise reading of the text.

Four Japanese risk scenarios: assignee data take-home, subsidiary outbound transmission, mid-career hires, JV sharing scope. Five steps: NCKT mapping, access control, leaver management, clean hire, counsel + whistleblower + training package.

Geopolitics is often discussed in capital letters. What this case actually tested was mid-career hiring flow and what remained on a departing laptop. Ordinary compliance. If this piece helps you audit that layer, it has done its job.

Related articles

• China export-control legal system complete guide
• China dual-use catalog 2026
• Japan economic security and dual-use technology risk
• U.S. EAR affiliate-rule risk
• Deemed export risk guide

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TRAFEED supports METI-, EAR-, and EU dual-use-aligned classification and end-user checks, and is extending hybrid trade-secret × export-control coverage such as NCKT and Article 8: transaction, hiring, and information-sharing flows.

• Automate 32-item mapping against internal documents
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References

Primary

• National Security Act (English): https://law.moj.gov.tw/ENG/LawClass/LawAll.aspx?pcode=A0030028
• NSTC NCKT designation notices (wave 1: 5 Dec 2023; wave 2: 2025)

Secondary reporting and analysis

• Atsumi & Sakai (26 Aug 2025); JETRO BizNews Dec 2023 and May 2022; JST CRDS column; Formosa Transnational; Focus Taiwan 5 Aug 2025; Jiji; Nikkei (Apr 2026); GIGAZINE 3 Dec 2025; Global Trade & Sanctions Law 26 Jan 2026; IAM; PwC Japan; The International Trade Council; Law.asia

Comparative

• EU Regulation 2021/821; U.S. ECRA/EAR (BIS); U.S. Economic Espionage Act (18 U.S.C. §§1831–1832)