Shares of Taiwan Semiconductor Manufacturing Co. slipped Tuesday on news that current and former employees stole the tech giant's trade secrets. TSMC stock shed nearly 3%.
Officials arrested three people in Taiwan after TSMC reported the potential leak of sensitive information, the Wall Street Journal reported.
"TSMC recently detected unauthorized activities during routine monitoring, leading to the discovery of potential trade secret leaks," the company said Tuesday, according to the Wall Street Journal.
The company did not say what technology was involved, the report said.
TSMC Stock: Major AI Player
The incident underscored the heightened competition in the semiconductor market, especially with the rapid advance of artificial intelligence.
TSMC is a major player in AI as the world's biggest semiconductor contract manufacturer. The company's customers include the world's biggest tech companies, including Nvidia and Apple.
The company last month posted second-quarter results that easily beat Wall Street estimates. TSMC Chief Financial Officer Wendel Huang said the company got a lift from "robust" demand in AI and high-performance computing.
"Moving into third quarter 2025, we expect our business to be supported by strong demand for our leading-edge process technologies," Huang said in a statement.
TSMC stock rallied on the company's earnings report. The shares are up 18% year to date, although the stock has shed more than 2% this month.
TSM stock has a Relative Strength rating of 90, down from 91 a week ago, according IBD MarketSurge.
