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ASML Accuses Former Employee of Stealing Trade Secrets

By: Aaron Kim, Insider Threat Analyst

ASML, a Dutch company which makes cutting-edge semiconductor circuits has accused a former employee of stealing its technology on behalf of a Chinese corporation. Zongchang Yu worked as an engineer at ASML up until 2012. After leaving ASML, he founded Dongfang Jingyuan Electron Ltd, a firm based in Beijing.

According to the Bloomberg’s report, ASML said Dongfang Jingyuan Electron Ltd. Is related to a defunct firm, Xtal Inc., which ASML sued for intellectual property theft. “A 2018 trial in California, which received scant attention at the time, provided more detail. Dongfang and Xtal were essentially the same, created a month apart in 2014 by a former ASML engineer named Zongchang Yu”, ASML’s attorney told the court. “The two companies worked in tandem toward the same goal: obtaining ASML’s technology and transferring it to China, which is seeking to foster its own semiconductor industry, often at the expense of Western companies”, the attorney argued.

The engineer was even involved in the two-million robbery of source codes from ASML, according to the transcripts of the proceedings. It was also said that employees from both Dongfang and Xtal in China and the US received the software.

Xtal lost the lawsuit and was ordered to pay $845 million, which ASML deemed “uncollectable”. Xtal filed for bankruptcy protection and the company dissolved soon after. Yu, who has an outstanding arrest warrant in California is now running Dongfang in Beijing with support from the Chinese government.

Patrick Ryan, ASML’s lead attorney has stated that this scenario is not an accident. He said that this was done intentionally to steal the technology so the Chinese government would benefit.

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This entry was posted on Friday, June 17th, 2022 at 3:12 pm. Both comments and pings are currently closed.