US-China chip war: ASML says China employee stole data

Major computer chip equipment maker ASML says a former employee in China stole information about its technology.

The Dutch firm says it has since reported the breach to authorities in the Netherlands and the US.

However, the company added that it does not “believe that the misappropriation is material to our business.”

ASML is one of the most important firms in the global microchip supply chain. It makes machines that produce the world’s most advanced chips.

Chips, or semiconductors, which are used to power everything from mobile phones to military hardware, are at the centre of a bitter dispute between the US and China.

“We have experienced unauthorised misappropriation of data relating to proprietary technology by a (now) former employee in China,” ASML said in its latest annual report.

“As a result of the security incident, certain export control regulations may have been violated. We are implementing additional remedial measures in light of this incident,” it added.

ASML did not name the former employee or give details on which export control regulations may have been violated.

A breach too many

This is not the first time that ASML has linked an intellectual property (IP) breach to China.

In its 2021 annual report, the firm said it was aware of reports that a Chinese semiconductor equipment and software maker, DongFang JingYuan Electron, “was actively marketing products in China that could potentially infringe on ASML’s IP rights.”

DongFang JingYuan Electron denied the allegations.

At the time the Beijing-based company said the reports were “inconsistent with the facts”.

“We reserve the right to take any other legal actions against the relevant false information,” it added.

Major companies in the semiconductor industry have faced controls on exports to China.

In October, Washington announced that it would require licences for companies exporting chips to China using US tools or software, no matter where they are made in the world.

The US has been pushing the Netherlands and Japan to adopt similar restrictions.

Since 2019 the Dutch government has stopped ASML from selling its most advanced lithography machines to China.

Lithography machines use lasers to print miniscule patterns on silicon as part of the manufacturing process of microchips.

BBC/Jamiu Ogunshe