Fri, Apr 12, 2019 - Page 10 News List

Chinese staff accused of corporate theft at ASML

Reuters, AMSTERDAM

Chinese employees stole corporate secrets from Dutch semiconductor equipment maker ASML Holding NV, resulting in hundreds of millions of dollars in losses, Dutch financial newspaper Financieele Dagblad (FD) reported yesterday.

The newspaper said, citing its own investigation, that technology had been stolen by high-level Chinese employees in the research and development department of ASML’s US subsidiary and ultimately leaked to a company linked to the Chinese government.

ASML itself “found no hard proof of involvement of the Chinese government,” the Financieele Dagblad reported.

An ASML spokeswoman told reporters that the company was aware of the newspaper report and was preparing a response.

ASML is the dominant maker of lithography systems, used to trace out the circuitry of semiconductor chips.

The newspaper based its report partly on company sources and partly on a ruling by a California court in November last year in a suit between ASML’s US subsidiary and a subsidiary of a Chinese company, XTAL Inc.

The documents from the Santa Clara, California, Superior Court showed that six former employees of ASML, all with Chinese names, breached their employment contract by sharing information on ASML software processes with XTAL, the Financieele Dagblad reported.

“The FD’s investigation found XTAL’s Chinese parent company Dongfang Jingyuan [東方晶源] has ties with the Chinese Ministry of Science and Technology,” the newspaper said.

The court awarded ASML US$223 million in damages and XTAL filed for bankruptcy a month later.

The Dutch intelligence agency has included warnings in its annual threat assessments for the past several years, saying that China is targeting tech companies in the Netherlands, as it does in other countries, for intellectual property theft.

In 2015, ASML disclosed a breach of its computer systems, but said at the time that damage from the hack was limited and released few further details.

ASML’s sales to China doubled to 1.8 billion euros (US$2 billion) last year from 919 million euros in 2017 as Beijing makes growth of its semiconductor industry a priority.

ASML chief executive officer Peter Wennink in January told reporters that he saw no let up in demand from China, despite an economic slowdown.

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