ASML admits Chinese data theft may have broken export controls
The world’s leading supplier of lithography equipment, ASML Holding NV (Veldhoven, The Netherlands), has lost technology secrets to a, now, former Chinese employee.
ASML is a monopoly supplier of extreme ultraviolet lithography equipment and was denied export licenses to send such equipment to China in 2019. More recently Japan and the Netherlands have been drawn into a compact with the US to broaden the ban on sending chipmaking equipment to China (see Japan, Netherlands agree to help US limit exports to China).
US foreign policy calls for such bans on the grounds that China is using technology to modernize the People’s Liberation Army and that this poses a threat to global security.
ASML admitted to the theft in its 2022 Annual Report saying: “We have experienced unauthorized misappropriation of data relating to proprietary technology by a (now) former employee in China. We promptly initiated a comprehensive internal review. Based upon our initial findings we do not believe the misappropriation is material to our business. However, as a result of the security incident, certain control regulations may have been violated. ASML has therefore reported the incident to relevant authorities. We are implementing additional remedial measures in light of this incident.”
ASML did not expand on the nature of the information or when the breach happened.
The US has been ramping up export controls on semiconductor technology for China and this has an impact on China’s ability to manufacture chips and progress its technology. Consequentially the Chinese state has been encouraging renewed efforts to develop domestic efforts to create a semiconductor manufacturing ecosystem (see China preps $143 billion chip support action, goes to WTO).
ASML was also the target of data theft prior to 2019. A company called XTAL Inc. and its parent Dongfang Jingyuan Electronics Ltd., were founded in 2014 by two former ASML employees who worked with two former colleagues to steal confidential information. In 2019 ASML made the point that particular episode was one of theft rather than espionage (see They were thieves not spies, says ASML).
Related links and articles:
Japan, Netherlands agree to help US limit exports to China
China preps $143 billion chip support action, goes to WTO
ASML wins punitive damages in Chinese IP theft case
Advanced logic, memory, YMTC come under China export controls
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US seeks to expand ban on ASML’s China sales
China warns Netherlands over blocked ASML export
US lobbied hard to deny China EUV lithography
They were thieves not spies, says ASML