Silicon chips, the foundation of modern technology, face escalating tensions over intellectual property and trade restrictions. These micro marvels power everything from smartphones to medical devices, with advanced semiconductors being essential components in military applications. As a result, countries fiercely protect their chip-related intellectual property through patents, trademarks, and trade secrets.
The semiconductor industry is a global collaboration, involving American design companies, European and Japanese equipment manufacturers, and Taiwanese fabrication facilities. However, recent restrictions on chipmaking tool exports to China by the United States have generated turbulence within the sector. The US perceives China’s growth in the industry as a national security threat due to the military applications of advanced semiconductors.
Europe’s largest tech corporation, ASML Holdings NV, has been caught in the crossfire. With a market capitalization of €248 billion, the company’s extreme ultraviolet lithography machines are highly valuable and well-guarded. ASML recently disclosed that a former employee in its China branch stole proprietary technology information, raising questions about potential ties to the Chinese government.
This theft occurred after the US imposed trade restrictions on the sale of ASML’s lithography machines to China. While ASML claims the misappropriation is not material to its business, the loss of proprietary information could have long-term consequences for the company’s dominance in the chip-making space.
ASML’s situation serves as a reminder for companies to examine their intellectual property protection strategies. This includes considering patents, designs, and trademarks, and ensuring enforceable confidentiality agreements with employees. Understanding the legal definition of a trade secret and available remedies in case of theft is crucial for safeguarding a company’s future.
While most companies may not face the geopolitical consequences experienced by ASML, protecting intellectual property is essential to maintaining a competitive edge in today’s technology-driven world.
By Viteshen Naidoo
Reviewed by Stefaans Gerber