Dutch company ASML builds one of the most important machines needed to produce the world’s most advanced chips. With US tipping restrictions, companies, including ASML, are scrambling to figure out what the rules really mean.
Emmanuel Dunant | AFP | Getty Images
ASMLIt is one of the world’s most important semiconductor companies.
The Dutch company said it does not consider the alleged misuse material to its business.
In its annual report, ASML said it “experienced the unauthorized diversion of data related to its proprietary technology by former (current) employees in China.”
“However, as a result of the security incident, we may have violated certain export control regulations. ASML has therefore reported the incident to the relevant authorities.”
The data that was misappropriated concerned documents. ASML did not provide details.
The security incident comes at a sensitive time for ASML and the Dutch government in the midst of a battle for technological supremacy between the United States and China. Semiconductors are a big part of that competition.
ASML occupies a unique position in the chip supply chain. The company makes tools called extreme ultraviolet lithography machines that are needed to produce cutting-edge semiconductors like those made by TSMC. ASML is the only company in the world that manufactures this kit.
The US is concerned that if ASML ships machines to China, Chinese chip makers could start making some of the world’s most advanced semiconductors.with extensive military and advanced artificial intelligence applications.
Since 2018, the US has reportedly put pressure on the Dutch government to stop ASML from shipping EUV equipment to China. ASML has never shipped this tool to China.
last month, bloomberg reported that the United States has agreed with Japan and the Netherlands to restrict exports of advanced chip-making machinery to China.
ASML said the deal could cover its advanced chip-making tools, but it doesn’t expect the move to have a material impact on its 2023 expectations.
“We understand that steps are being taken to target advanced lithography tools and other types of equipment. We anticipate that it will take many months to create and enact new rules,” ASML said Wednesday.
Suspected Chinese spy
The latest report of data misuse in China is not the first incident ASML claims to have experienced.
In 2021, ASML claimed a company called Dongfang Jingyuan Electron. “We were actively selling products in China that may infringe ASML’s intellectual property rights.”
ASML alleges that Dongfang Jingyuan Electron is associated with XTAL Inc. XTAL Inc. is the company ASML has won damages for embezzlement of trade secrets in the US in 2019.
Donfang Jingyuan Electron denies reports of intellectual property theft.
In a separate statement Wednesday, ASML said the number of attackers trying to steal its technology is increasing.
“ASML’s unique position and heightened geopolitical tensions in the semiconductor industry have resulted in a growing trend of security risks, from ransomware and phishing attacks to intellectual property acquisition and disruption of business continuity. ‘ said the spokesperson.
Meanwhile, China is trying to boost its own semiconductor industry amid rising tensions with the United States, but China’s semiconductor capabilities lag far behind those of the likes of Taiwan, South Korea and the United States.
There is no company in China that can create tools that ASML does. Without ASML machines, it would be difficult for China to manufacture cutting-edge chips. Meanwhile, the U.S. in October introduced drastic export restrictions aimed at cutting off China from acquiring or manufacturing key chips and components. An expert previously told CNBC that these factors are likely to hamper China’s efforts to boost its domestic semiconductor industry.
