ASML, one of the most important semiconductor companies in the world, announced on Wednesday that it had found evidence that a former employee in China had stolen information related to ASML’s proprietary technology.
According to the Dutch company, the alleged theft is not a major setback for operations.
According to ASML’s most recent annual report, “We have experienced unauthorised misappropriation of data relating to proprietary technology by a (now) former employee in China.”
However, the security incident may have caused violations of export control laws. In light of this, ASML has notified the proper authorities.
Documents were part of the stolen information. When pressed for clarification, ASML provided none.
This security breach has occurred at a particularly delicate time for ASML and the Dutch government, which has found itself in the crosshairs of the ongoing battle between the United States and China for global technological preeminence. Semiconductors play a significant role in this competitive environment.
ASML is in a special place in the supply chain for semiconductors. Extreme ultraviolet lithography machines, which this firm produces, are essential for creating cutting-edge semiconductors like those produced by TSMC. As far as we’re aware, ASML is the only manufacturer of this particular piece of equipment.
The United States is concerned that Chinese chipmakers will start producing the world’s most advanced semiconductors, which are used in cutting-edge artificial intelligence and military applications, if ASML ships the machines to China.
According to reports, the United States has been pressuring the Dutch government to prevent ASML from shipping EUV machines to China since 2018. The tool has never been sent by ASML to China.
Bloomberg reported last month that the United States, Japan, and the Netherlands had all agreed to limit the export of high-tech chipmaking equipment to China.
According to ASML, the agreement could apply to its state-of-the-art chipmaking equipment, but the measures won’t have a “material impact” on the company’s projections for 2023.
It has been brought to our attention that measures have been taken to include state-of-the-art lithography tools among other machinery. The specifics of this agreement are currently under wraps and unavailable to the general public. As of Wednesday, ASML predicted that new regulations would take many months to be written and enacted by governments.
Claims of espionage from China
As you may recall, this is not the first time ASML has reported data theft in China.
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Dongfang Jingyuan Electron, according to a 2021 ASML lawsuit, “was actively marketing products in China that could potentially infringe on ASML’s IP rights.”
According to ASML, Dongfang Jingyuan Electron is linked to XTAL Inc., a company that ASML won a damage award against in 2019 in the United States for trade secret misappropriation.
According to Donfang Jingyuan Electron, rumours of theft of intellectual property are false.
On Wednesday, ASML announced in a separate statement that the number of attempts by third parties to steal its technology had increased.
Security risk trends, such as ransomware and phishing attacks, attempts to acquire intellectual property, and disruptions to business continuity are all on the rise, a company spokesperson said, citing ASML’s unique position and rising geopolitical tensions in the semiconductor industry.
Despite escalating tensions with the United States, China is working to expand its domestic semiconductor industry. However, China’s chip manufacturing is years behind that of South Korea, the United States, and Taiwan.
There are currently no domestic Chinese companies that can match ASML’s level of tool manufacturing. It will be difficult for China to produce cutting-edge chips without the equipment made by ASML. In the meantime, in October, the United States implemented broad export restrictions aimed at preventing China from importing or producing critical chips and components. As CNBC reported earlier, experts had warned that these challenges would make it difficult for China to expand its domestic chip manufacturing.
