Four former engineers at Applied Materials Inc have been charged by the US with trying to steal chip designs from the semiconductor equipment giant to sell them to a Chinese start-up, fueling fears that the world’s second-largest economy is resorting to illegal tactics to break its dependence on chip imports.
Liang Chen, Donald Olgado, Hsu Wei-yung and Robert Ewald are accused of downloading data from Applied’s internal engineering database, including more than 16,000 drawings, and plotting to lure investors to fund a US and China-based start-up that would compete with their former employer, prosecutors said on Wednesday in a statement.
The stolen specs detailed Applied’s processes for high-volume manufacturing of chips used to light and electrify flat-screen TVs and smartphones.
If convicted, the four face as long as 10 years in a US federal prison for each of 11 counts of possessing stolen trade secrets. They are scheduled to be arraigned on Dec. 15 in San Jose, California.
“Applied Materials vigorously safeguards its intellectual property from theft or unlawful use,” a spokesman for the company said in a statement. “We support the legal action in this criminal case to ensure that anyone who obtained our trade secrets illegally is brought to justice. We cannot comment further on pending legal actions.”
The alleged criminal scheme that netted the four former engineers is tied to the complex process of growing crystalline layers on chips called metal organic chemical vapor deposition (MOCVD), technology developed by Applied after “years of research and testing, and millions of dollars in investment,” according to the indictment.
Applied’s “Paragon” project led to the development of a consumer product called NLighten, which the engineers allegedly tried to replicate and build on.
Sometime while they were working together at Applied between July 2000 and December 2012, the four employees conspired to steal the MOCVD technology and use it to create a competing company called Envision, according to prosecutors. Late in 2012, they attempted to recruit investors to fund Envision in both the US and China, according to the indictment.
The charging papers do not detail the value of the theft or the amount the engineers sought in funding.
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