ASML says ‘small’ espionage incident could have been handled better

Photo: ASML
Photo: ASML

The board of chip machinery maker ASML has admitted that it should have been more open about the theft of technology by a Chinese rival, the Financieele Dagblad said on Thursday.

Earlier this month, the paper said highly-placed Chinese workers had been able to get away with source codes, software, price strategies and secret user manuals which they then used to set up their own company. FD based the claims on its own research and Californian court documents.

Those documents showed that at the end of 2018, a court in California ordered the Chinese firm XTAL to pay $233m in damages to ASML after ASML took the company to court for the ‘misappropriation of trade secrets’

But shareholders were not informed about the case at the time, because the ASML board decided it was ‘too small scale’ to be worth mentioning.

Chief executive Peter Wennink told Wednesday’s ASML shareholders meeting that he understood the current unease about the situation. ‘But at the time we thought it was a minor affair,’ he is quoted as saying by the FD in response to shareholders’ questions.

‘It is normal business to protect our intellectual property and this was too small to go public with,’ he said.

CFO Roger Dassen told the meeting that the company had barely been damaged by the case and that the chance of recovering the court-awarded damages is nil, given XTAL has since gone bust.

Wennink also repeated his earlier statement that there is evidence the Chinese authorities were involved in the theft of company secrets.

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