Former ASML Employee Took Stolen Company Secrets to Huawei, Says Report

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ASML CEO previously characterized the theft as limited in nature.

ASML EUV machine
(Image credit: ASML)

A major Dutch news organization has been digging into details regarding the 'unauthorized embezzlement', that ASML informed shareholders about last year. According to NRC’s investigations, the incident could be more accurately described as the theft of trade secrets and the passing of them to China’s Huawei.

The timeline, according to the source report, goes something like this:

  • Chinese national works at ASML and gains knowledge of some of the Dutch firm’s trade secrets,
  • Chinese employee leaves ASML in 2022,
  • This former-ASML employee starts work at Huawei,
  • ASML company secrets shared with Huawei.

In its 2022 annual report, ASML mentioned that it had been a victim of 'unauthorized embezzlement.' If the NRC report is correct, that is ASML’s euphemism for being a victim of trade secret thefts.

In 2023, ASML CEO Peter Wennink told investors that the stolen information was quite limited. Wennick described the IP theft as “one piece of a puzzle you don't have the box for.” No details were shared regarding the Huawei connection, which has been uncovered by NRC and its multiple sources. ASML insists that its internal security is now much tighter, implying there couldn’t be a repeat of the IP theft today.

Back in Feb, Bloomberg reported that an ex-ASML employee stole chipmaking tool information and took it to China. However, that report didn’t point the finger at Huawei as the stolen data beneficiary.

We have previously reported on tactics Huawei is employing to prosper in the face of US-led sanctions on China. Recently we observed that Huawei was still operating and hiring in Russia. Moreover, the firm is trying to scalp Taiwanese talent and is doing all it can to support China’s AI ambitions.

Such actions seem to have helped Huawei stay alive and even thrive, as evidenced by its sanctions-busting new HiSilicon Kirin 9000s SoC, and its progress with developing and acquiring chip-making equipment.

It is difficult to know if the US tech sanctions are the best policy against the increasingly belligerent China. On the one hand, the sanctions should help restrict cutting-edge tech that could be used to develop or be integrated into weapon systems. On the other hand, China could be spurred to develop (or steal) homegrown tech, which may one day rival the best from the US and its allies. 

Mark Tyson
Mark Tyson
News Editor

Mark Tyson is a news editor at Tom's Hardware. He enjoys covering the full breadth of PC tech; from business and semiconductor design to products approaching the edge of reason.

16 Comments Comment from the forums
  • Evildead_666
    While China was still making chips at TSMC, the US could keep an eye on what was being made, and maybe even more.
    Now they have no idea what is being made, and no levers to pull.
    If TSMC is no longer needed for China to fab any chips, it also loses leverage....

    If the Chinese worker didn't actually take any physical data, just what he had in his head, its not easy to prove theft, hence embezzlement, no ?
    Reply
  • endocine
    There are a lot of red flags here for any company. IP theft by the Chinese state is a huge problem, why a company in the netherlands would hire a Chinese national is incomprehensible. When US companies refuse to do so, they get sued for discrimination, and often lose. Might as well put all your IP on your public facing website because its going to get misappropriated anyway for whatever reason, but at least it would be an open standard.
    Reply
  • Evildead_666
    endocine said:
    There are a lot of red flags here for any company. IP theft by the Chinese state is a huge problem, why a company in the netherlands would hire a Chinese national is incomprehensible. When US companies refuse to do so, they get sued for discrimination, and often lose. Might as well put all your IP on your public facing website because its going to get misappropriated anyway for whatever reason, but at least it would be an open standard.
    I think in Europe you arent allowed to refuse employment based on country of origin.
    Reply
  • defiantDti
    What now? Huawei can't employ former ASML employee? Employee switch job and work for competitors all the time !
    Reply
  • jackt
    how a huge suprise!
    Reply
  • BX4096
    Evildead_666 said:
    I think in Europe you arent allowed to refuse employment based on country of origin.

    defiantDti said:
    What now? Huawei can't employ former ASML employee? Employee switch job and work for competitors all the time !

    The problem here is that of national security and truly unparalleled scale, though, so I don't think other countries can afford to just dismiss it as your run-of-the-mill discrimination:

    Chinese hackers took trillions in intellectual property from about 30 multinational companies "A yearslong malicious cyber operation spearheaded by the notorious Chinese state actor, APT 41, has siphoned off an estimated trillions in intellectual property theft from approximately 30 multinational companies within the manufacturing, energy and pharmaceutical sectors."
    Global intelligence leaders warn against China's technology theftAll countries spy to covertly learn information, Australia's Director-General of Security Mike Burgess said. "But the behavior we're talking about here goes well beyond traditional espionage," Burgess said of China. "This scale of the theft is unprecedented in human history." "We probably have somewhere in the order of 2,000 active investigations that are just related to the Chinese government's effort to steal information," Wray said.
    Reply
  • Blastomonas
    This is true as it would be considered descrimination. However, Im sure that employers are not always honest with the reasons for not hiring people. In other words, they could make up some excuse not to hire someone if they are suspicious of their background. Perhaps there will be some new rules in the future for exceptions to the equality act for these industries.
    Reply
  • _Shatta_AD_
    endocine said:
    There are a lot of red flags here for any company. IP theft by the Chinese state is a huge problem, why a company in the netherlands would hire a Chinese national is incomprehensible. When US companies refuse to do so, they get sued for discrimination, and often lose. Might as well put all your IP on your public facing website because its going to get misappropriated anyway for whatever reason, but at least it would be an open standard.
    Companies all over the globe poach employees from other companies all the time in the hope of benefiting from the experience they gained from working in their previous job. So a person working for Popeyes who gained knowledge of say prepping the chicken in a certain way to make it more flavorful and moist, then they quit and got hired at KFC and that person teach others at the store the same techniques he learned. Is it right for Popeyes to claim that employee stole their IP? Afterall you got hired at any company to help improve a company’s efficiency and products because they think you have more experience than just some random Joe on the street. Otherwise you won’t even have a job. My point is, sharing your experience gained from working at another place is not a crime. But of course your competitor will claim otherwise, they’ll claim your shoe and the hair on your scalp is their IP. Then the news media get a whiff and paraphrase a bit and suddenly the employee became a thief and everyone scorn at him.
    We barely had any details on what the nature of this accusation is other than someone at ASML ‘claim’ an IP theft transpired. Nothing about what is stolen, can this knowledge be considered an IP by third party, did Huawei benefited unfairly from it, prove that they did, etc. Just someone said, and everyone draw a conclusion.
    Reply
  • Co BIY
    The most advanced production technology in the world where a single "tool" costs over $300 million dollars and the research costs Billions and takes thousands of man-years to develop is not like frying chicken.

    These techniques are not something that an employee stores in their head and then just happens to use to a new employers serendipitous benefit.

    The Chinese Communist state is not just another greedy corporation looking to make a buck the easy way by cutting a corner here-or-there.

    To pretend those things - is be a troll or very ignorant.
    Reply
  • purpleduggy
    lol semiconductor engineers jump companies all the time. you need to constantly out-innovate. if you are stagnant, and want to protect your stagnancy instead of out innovating, you will be copied. should already be at sub nanometre gate size. 2nm is ancient tech already
    Reply