This is such a bad idea.

Care to say why? Security always comes at a cost ...

You don't need to deliberately create silos in order to secure a project. We've had people working on top secret projects and while people may not have known the specifics the company was kept up to date on the progress and outcomes of the project. We brought people in from other teams after an extra vetting process and additional NDA specific to that project.

With industrial espionage, NDAs aren't going to cut it ...

For the vast vast majority of companies, their success comes down to culture and execution rather than "the tech secret". You can't really steal that.

I will grant you, the specific case of TSMC is definitely in the rarer case where there are true tech secrets.

Apple does this.

Most companies aren't Apple.

Apple is great because their hardware and software is so well integrated.

If they compartmentalize their hardware and software departments, we might as well split them into a hardware and a software company.