ASML, a major computer chip equipment maker based in the Netherlands, has reported a breach of its proprietary technology to the authorities in the US and the Netherlands. According to the firm, a former employee in China stole information related to its technology. While ASML has not named the employee or detailed the regulations that may have been violated, it did reveal that additional remedial measures are being taken in light of the incident. Despite the breach, the company says that it does not believe the misappropriation of data is material to its business.
ASML is a key player in the global microchip supply chain and produces machines that manufacture some of the world’s most advanced chips. Semiconductors, or chips, are critical to various industries, including mobile phones and military hardware. The US and China are currently embroiled in a bitter dispute over chips, with each country imposing restrictions on the other’s chip companies.
This is not the first time that ASML has linked an intellectual property (IP) breach to China. The company’s 2021 annual report stated that a Chinese semiconductor equipment and software maker, DongFang JingYuan Electron, had been actively marketing products that could potentially infringe on ASML’s IP rights. However, DongFang JingYuan Electron denied the allegations, stating that the reports were “inconsistent with the facts” and that it reserved the right to take legal action against false information.
Semiconductor companies, including ASML, have faced export controls to China. In October 2022, the US announced that companies exporting chips to China using US tools or software, regardless of where they are manufactured, would require licenses. The Netherlands and Japan have been urged to adopt similar restrictions. Additionally, the Dutch government has banned ASML from selling its most advanced lithography machines to China since 2019.
Theft of technology is a significant concern for firms in the semiconductor industry, as it can result in a loss of revenue and a loss of competitive advantage. As technology continues to play an increasingly crucial role in global affairs, the battle over intellectual property will undoubtedly become more intense. ASML’s reported data breach highlights the need for companies to implement more robust security measures to protect their intellectual property from theft, especially in industries where technology plays a critical role.
