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TSMC's trade secrets registry system designed to spur

innovation

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Database logs over 610,000 cases of technologies and

know-how

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TSMC has begun promoting the system to suppliers

By Wen-Yee Lee

TAIPEI, Aug 28 (Reuters) - Taiwan's TSMC

manufactures the world's most advanced chips. It now wants to

teach its suppliers and partners how to better manage their

trade secrets to foster innovation.

The company, the world's largest chip foundry that makes

chips for the likes of Nvidia ( NVDA ) and Apple ( AAPL ), plans

to market a system it has built to manage and leverage its

treasure trove of trade secrets to companies in Europe and the

United States, its associate general counsel told Reuters.

Fortune Hsieh, who also chairs the Taiwan Association for

Trade Secrets Protection, said the trade secrets registry system

which TSMC began building in 2013, has been adopted so far by 20

local firms, including ASE Technology Holding Co. ( ASX )

"If our suppliers also adopt this trade secret registration

and management system... it can help them build a stronger

innovation culture and more systematic management...and in turn,

we benefit from that as well," Hsieh said in an interview.

The registry system stemmed from an idea that companies

should not only look to protect their trade secrets but

catalogue them in a way that they can encourage innovation, he

said.

The ultimate goal is to retain more technology within the

company and reinforce TSMC's competitive advantage, he said.

TSMC has more than 610,000 cases logged onto its trade secret

registration system at the end of July that included

technologies and know-how, Hsieh said.

The database integrates with its HR and IT platforms and uses

artificial intelligence analytics to monitor projects, track

joint development with outside partners and identify standout

talent, he added.

Asked whether building such a large database could make TSMC

a more attractive target for hackers, Hsieh said: "At the very

beginning of establishing the trade secret registration system,

cybersecurity was already a fundamental and necessary

consideration."

He said the system is protected by information security

processes and automatic encryption of archived files, including

the trade secret database, ensuring that even if hackers

obtained the data, they would not be able to read its contents.

Despite its efforts to protect its trade secrets, TSMC recently

reported a theft case, underscoring challenges companies face in

keeping their proprietary technologies protected.

Jeanne Wang, a partner at Tsar & Tsai Law Firm in Taipei,

said the system helps R&D-driven companies keep track of their

vast confidential know-how and makes it easier to present

evidence when a dispute arises.

"Without an inventory, a company would need to expend

significant effort to locate information, but with a

registration system, retrieval is much faster," she said,

calling such a system rare among global companies.