ASML admits intellectual property loss to firm linked to Chinese government

ASML plays down industrial espionage claiming that it was not part of a 'national conspiracy'

Dutch chip machinery maker ASML has admitted that it fell victim to industrial espionage in 2015, but claimed that the intellectual property thieves had not stolen blueprints for its semiconductor manufacturing machinery.

It added that the alleged intellectual property theft was not part of any "national conspiracy".

On Thursday, Dutch financial newspaper Financieele Dagblad reported that a number of Chinese employees at the company in Silicon Valley had been involved in the theft of corporate secrets, including software, source code, secret user manuals and print strategies from ASML in 2015.

The newspaper claimed that those workers were part of ASML's research and development department, and had leaked secrets to a company, which in turn had direct links with a Chinese government ministry. It said the theft resulted in millions of euros in losses for ASML.

The newspaper based the claims on its own investigation and Californian court documents.

However, ASML has refrained from saying that Chinese employees were involved in the theft, according to Reuters.

In a statement, ASML told Reuters that all information related to the theft incident was available in US court documents.

In 2015, ASML's US subsidiary filed a case in a Santa Clara, California court against XTAL, a subsidiary of Chinese firm Dongfang Jingyuan, accusing six of its former employees of violating their contract by leaking information on ASML software processes to XTAL.

The Financieele Dagblad investigation indicated that Dongfang Jingyuan had ties with China's Ministry of Science and Technology.

According to the newspaper, Dongfang Jingyuan has received subsidies from the Chinese government for a project that aims to strengthen China's position in global chip machinery market.

ASML won the case last November, and was awarded $223 million in damages from XTAL, which later filed for bankruptcy.

The news about the industrial espionage comes at a time when ASML's sales in China are rising fast, as chip production in China increases.

Earlier this week, China signed a deal with EU, which promises not to force European Union companies interested in doing business in China into sharing sensitive details about their operations.

China has become an important market for ASML, offering it enormous growth potential. Last year, ASML's sales to China increased to €1.8 billion, which accounted for about one-sixth of the company's total sales.