Sure Looks Like Beijing Stole Blueprints From Chip Fab World's ASML

A former ASML worker accused of stealing trade secrets for advanced chip-making equipment from his employer is now suspected of spying for the Chinese government.

Citing sources familiar with an internal ASML probe into the alleged theft, Bloomberg reports the employee, who is apparently based in China, had “potential” ties to a Beijing-backed spy ring and may have been stealing that data on its behalf.

ASML, for those who don't know, is headquartered in the Netherlands, and makes the highly specialized equipment used by Intel, TSMC, and others, to fabricate silicon chips in their own fabs.

The blueprint theft, ASML’s second in less than a year, comes as the US is pressuring its allies to starve out China’s domestic chipmaking efforts. This campaign includes barring the export of lithography machines built by ASML and others that are used by foundries - such as TSMC and Samsung Electronics - to produce advanced semiconductors used in smartphones, laptops, and servers.

ASML agreed last year not to export extreme ultraviolet lithography (EUV) machines to China. These machines are essential to producing chips using 10nm process nodes and smaller. More recently, the Dutch government said it would take steps to cut off China from ASML's older deep ultraviolet lithography (DUV) machines.

While DUV equipment is made by a variety of suppliers including Canon and Nikon, ASML remains the sole supplier of EUV machines. This makes the intellectual property necessary to build EUV hardware an incredibly valuable commodity for a country like China, which lags behind Taiwan and Korea’s foundries.

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The efforts have forced Chinese chipmakers and government officials to reevaluate their strategies with the country’s Academy of Science releasing a blueprint for how to circumvent US export controls. And while the report emphasizes original research, the Middle Kingdom clearly isn’t above a little espionage.

As likely targets go, ASML has proven particularly leaky. Earlier this month it disclosed in an annual report that it’d suffered an “unauthorized misappropriation of data related to proprietary technology” by an employee based in China.

Bloomberg reports that while ASML hasn’t found a direct link between the employee and the Chinese government, the investigation is ongoing. The security breach is also being investigated by US authorities as the stolen data is subject to US export controls.

This would imply the stolen IP may be related to the manufacture of EUV equipment. That would certainly help to advance Chinese foundries, which have largely been stuck at 14nm process nodes, although some reports indicate that SMIC has recently gained the ability to produce 7nm node chips.

Making matters worse, this isn’t the first time ASML’s IP has found its way into the hands of the Chinese government. Last year, ASML accused China’s Dongfang Jingyuan Electron of stealing trade secrets.

The company was founded by a former ASML employee and as Bloomberg reports, is now wanted in the state of California on charges of intellectual property theft. The employee was accused of founding companies in the US and China with the intent of funneling data back to the CCP. ®