(Bloomberg) — Taiwan prosecutors arrested six people suspected of stealing trade secrets from Taiwan Semiconductor Manufacturing Co., opening an investigation into a potential breach of national security involving a global tech industry linchpin. 

The chipmaker to Nvidia Corp. reported a number of former and current staff to authorities on suspicion they illegally obtained core technology. A total of six people were arrested, with two posting bail and one released afterwards, said Taiwan High Prosecutors Office spokesman John Nieh. Prosecutors searched the homes of some staff between July 25 and July 28, the agency said in a statement. It’s now trying to find out if data had been leaked to other parties.

TSMC is the world’s most advanced maker of semiconductors, from Nvidia AI accelerators to Apple Inc. iPhone processors. The case coincides with a quickening race by the likes of Meta Platforms Inc. and DeepSeek to develop artificial intelligence in the post-ChatGPT era, which requires billions of dollars in servers and datacenters.

On Tuesday, the Nikkei reported that TSMC fired several employees suspected of trying to obtain critical information on 2-nanometer chip development. That next-generation semiconductor process is entering mass production in the second half of this year.

Local investigators also searched the Taiwanese premises of Japanese supplier Tokyo Electron Ltd., the Financial Times reported. Company representatives declined to comment. 

TSMC has taken disciplinary action against personnel involved and initiated legal proceedings, the company said in a statement without elaborating. It conducted an internal investigation and identified the issue “early,” the firm added in its statement. 

The case shines a spotlight on TSMC, one of the companies at the heart of the global infrastructure boom. 

Investment in chipmaking development is at an all-time high, as TSMC and closest rival Samsung Electronics Co. set aside more than $30 billion in annual capital expenditures, while US and Chinese companies vie to develop the most advanced technology.

China’s progress has stalled several generations behind TSMC, with Huawei Technologies Co. and Semiconductor Manufacturing International Corp. now fabricating silicon at 7nm. In the US, Intel Corp. is at a more advanced stage.

–With assistance from Mayumi Negishi, Peter Elstrom and Takashi Mochizuki.

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