ASML was hit by Chinese espionage

ASML was hit by Chinese espionage

Business news |
By Peter Clarke

ASML is the world leader in lithography and the monopoly supplier of extreme ultraviolet violet lithography equipment for the most advanced forms of chip manufacturing. China has few world-class semiconductor equipment vendors and would like to establish more as part of a general improvement of its semiconductor ecosystem and self-suffciency in chips.

The theft took place from an ASML software subsidiary called Brion in California in about 2015 and the information was revealed in US court documents relating to a lawsuit that ASML won in November 2018. According to Dutch business daily Financieele Dagblad, six former ASML employees, all with Chinese names, breached their employment contract by taking information on ASML software processes to a Chinese company called XTAL Inc.

XTAL and its parent Dongfang Jingyuan Electronics Ltd. offer IC design and manufacturing optimization services. XTAL was founded in 2014 by two former ASML employees who then worked with two of their former colleagues still at Brion to steal confidential information, reports state. Apparently, with this information XTAL was able to win business contracts with a number of semiconductor companies away from Brion.

ASML said that “large files” were downloaded onto memory sticks and taken from its software subsidiary, but has since taken steps to make such thefts more difficult, according to a Reuters report.

In November 2018, the court found in favour of ASML and awarded $223 million in damages and XTAL filed for bankruptcy a month later, Reuters said.

Financieele Dagblad reported that XTAL’s parent company Dongfang Jingyuan has ties with the Chinese Ministry of Science and Technology.

“Can we prudently do business in China? Yes of course. This was a rotten apple,” Reuters reported ASML saying in a statement.

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