US Eyes AI Chip Tracking; TSMC Fights Tech Theft
The United States government is exploring new technical measures to control the flow of advanced semiconductors to China, including equipping AI chips with enhanced location-tracking capabilities. This initiative is part of a broader effort to prevent smuggling and maintain American technological leadership in the semiconductor sector. Officials are reportedly discussing potential software or hardware modifications that would make these chips easier to monitor.
Michael Kratsios, a key architect of a Trump-era AI action plan, confirmed that such controls are under consideration. The move comes as Chinese officials recently summoned representatives from Nvidia to discuss both US export controls and alleged security concerns regarding the company’s H20 chips, which Nvidia has stated contain no “backdoors.” Kratsios noted he has not personally engaged with Nvidia or AMD on the development of tracking technology.
Parallel to Washington’s focus on external controls, a significant internal security breach has come to light at Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest contract chipmaker. TSMC has dismissed several employees and initiated legal action following accusations that they attempted to obtain sensitive information related to the company’s cutting-edge 2-nanometer chip technology.
The 2-nanometer process, slated for mass production later this year, represents the pinnacle of current chip manufacturing technology. Only a handful of companies, including TSMC, Samsung, and Intel, are developing this advanced capability, supplying critical components to major clients like Apple, AMD, and Nvidia. TSMC has previously faced scrutiny under US export controls, particularly after its advanced technology was reportedly found in Huawei’s Ascend chips, which are central to China’s efforts to develop domestic alternatives to Nvidia’s AI accelerators.
TSMC stated that the unauthorized activities were detected through routine internal monitoring. The company maintains a zero-tolerance policy against trade secret violations and has vowed to pursue strict legal consequences for any breaches.
Taiwanese prosecutors have confirmed that an investigation into the incident is being conducted under the National Security Law, enacted in 2022. This law is specifically designed to protect sensitive technologies, especially semiconductors, from foreign adversaries, classifying chip technologies more advanced than 14 nanometers as national core critical assets.
According to prosecutors, TSMC reported the case after its monitoring systems flagged unusual data access patterns. An internal probe subsequently revealed that a former employee, allegedly in coordination with current employees, attempted to steal trade secrets. Authorities have indicated strong suspicion that three individuals violated the law, and a court has approved their detention. Investigators are now working to determine the motives behind the alleged theft and whether any sensitive data was transmitted to third parties.