ASML Warns Chinese Rival May Be Infringing Its Trade Secrets

(Bloomberg) — ASML Holding NV has warned that an affiliate of a China firm it beforehand accused of stealing its commerce secrets and techniques has begun advertising merchandise that might infringe on its mental property rights. 

“Early in 2021, we grew to become conscious of stories that an organization related to XTAL Inc., towards which ASML had obtained a injury award for commerce secret misappropriation in 2019 within the USA, was actively advertising merchandise in China that might probably infringe on ASML’s IP rights,” the Dutch firm stated in its newest annual report launched on Wednesday. 

ASML has requested sure clients to not help the related agency Dongfang Jingyuan Electron Ltd. — a company that has acquired Beijing’s stamp of approval beneath a program often called “little giants” — and knowledgeable the Chinese language authorities of its considerations. The corporate stated it’s “monitoring the state of affairs intently and is able to take authorized motion if applicable.”

An inquiry despatched to the official e mail listed on XTAL’s web site couldn’t be delivered, and calls to Dongfang Jingyuan’s headquarters in Beijing went unanswered.  

ASML occupies a pivotal function within the world chip provide chain. It has a monopoly on superior excessive ultraviolet, or EUV, lithography methods which can be indispensable to producing probably the most cutting-edge chips on the planet, and it additionally provides deep ultraviolet lithography machines wanted to make extra mature semiconductors. The mental property allegedly stolen was associated to software program and never ASML’s core lithography expertise, a spokesperson for the corporate stated.

China is reliant on ASML’s expertise because it tries to construct a home chip ecosystem that can cut back its dependence on international imports. However that effort has been thwarted, with the U.S. authorities reportedly pressuring Dutch officers to not permit ASML to promote its EUV methods to China in 2019. 

To today, ASML nonetheless has not obtained an export license to ship its most superior machines to China. 

Chinese language corporations racing to construct up their technological prowess have typically been accused of stealing commerce secrets and techniques from international companies. Whereas Beijing has categorically denied such practices, IP theft has lengthy been a sticking level in China’s relations with different nations, notably with the U.S. 

In 2019, a U.S. courtroom awarded ASML $845 million in damages in a commerce secrets and techniques theft lawsuit towards XTAL, though the Dutch firm denied it was a sufferer of Chinese language espionage. 

“The suggestion that we have been by some means sufferer of a nationwide conspiracy is mistaken,” ASML Chief Government Officer Peter Wennink stated then. 

In Might 2021, Dongfang Jingyuan acquired the title of “little big,” a designation for startups which have been chosen beneath an bold authorities program geared toward fostering a tech trade that may compete with Silicon Valley. 

The little giants label has turn out to be a valued measure of presidency endorsement, a sign for traders and staff that the businesses are insulated from regulatory punishment. President Xi Jinping has given his private blessing to this system.