Semiconductor manufacturing equipment maker Tokyo Electron was caught up in widening legal action initiated by TSMC over alleged theft of trade secrets, with Taiwanese prosecutors charging the Japan-based company’s local unit with national security violations, Reuters reported.

Tokyo Electron failed to take necessary steps to prevent the alleged theft by an employee referred to as Chen who was indicted in August, Reuters reported prosecutors as stating.

Prosecutors reportedly stated the company’s unit in Taiwan had a legal duty to supervise Chen and “should bear corporate criminal liability”.

The unit could be fined up to TWD120 million ($3.8 million).

In August, Taiwanese prosecutors charged three staff for allegedly attempting to access TSMC’s confidential 2nm development and production data.

Chen is a former TSMC employee who joined Tokyo Electron and was one of those indicted.

Meanwhile, TSMC is taking legal action against a former senior executive suspected of stealing trade secrets when he retired and moved to a job at rival Intel.

Intel denies TSMC’s claims.