This article first appeared on GuruFocus.

TSMC (NYSE:TSM) shares slipped about 1% while Intel (NASDAQ:INTC) edged up about 2% early Tuesday after Taiwan Semiconductor sued former executive Wei-Jen Lo, accusing him of transferring trade secrets to Intel, according to a Tuesday court filing.

Lo, a 21-year company veteran, retired earlier this year after serving as senior vice president of corporate strategy and leading research and development, TSMC said.

Warning! GuruFocus has detected 1 Warning Sign with XIACY.

Is TSM fairly valued? Test your thesis with our free DCF calculator.

The foundry said Lo signed a non-compete and alleged there is a high probability he used or disclosed confidential information after joining Intel.

Intel dismissed the claim, saying it respects intellectual property rights and expects the matter to be resolved through legal processes.

The dispute arrives as U.S.-Taiwan trade talks spotlight semiconductors and tariffs, with Washington having imposed broad levies on some exports while largely exempting chips.

Despite thid dip, TSMC remains the world's largest contract foundry and is advancing AI-focused chip design to address high energy demands in advanced processors.