Former Employees Accused of Stealing Computer Chip Designs for a Chinese Startup

December 8, 2017

Four chip engineers are being accused of attempting to steal chip designs from their former employer, semiconductor equipment company Applied Materials Inc.

The suspects, identified as Liang Chen, Donald Olgado, Wei-Yung Hsu, and Robert Ewald reportedly downloaded data from the firm’s internal database. The stolen data contained over 16,000 drawings outlining the processes for manufacturing a high volume of chips that are used for televisions and smartphones, which the group allegedly intended to sell to a Chinese startup.

According to state prosecutors, the men were also planning to seek funding for a startup called Envision based between the U.S. and China to compete with their former company, reported Bloomberg.

“Applied Materials vigorously safeguards its intellectual property from theft or unlawful use,” company spokesman Ricky Gradwohl was quoted as saying.

“We support the legal action in this criminal case to ensure that anyone who obtained our trade secrets illegally is brought to justice. We cannot comment further on pending legal actions.”

According to the indictment, the four engineers wanted to grow crystalline layers on chips known as metal organic chemical vapor deposition, which was developed by Applied after “years of research and testing, and millions of dollars in investment.”

The company’s “Paragon” project resulted in a consumer product called NLighten, which the four reportedly attempted to copy and further build on.

While working at Applied from July 2000 to December 2012, the engineers tried to nab the MOCVD technology and use their person email addresses to discuss plans.

Lower-level employees were asked to help them download confidential documents, and store them on a Google drive while taking the tech from the company in Santa Clara, California.

China, which is currently the largest consumer of semiconductors, has remained heavily reliant on chip imports from the U.S. and other countries in recent years.

A warning issued by former President Barack Obama’s administration back in January touched on China’s push to develop domestic semiconductor technology.

“The Chinese government, motivated by economic and national-security goals, has publicly asserted its desire to build a semiconductor industry that is far more advanced than today and less reliant on the rest of the world,” stated the White House report. “Its strategy relies in particular on large-scale government spending, including $150 billion in public and state-influenced non-government funds over ten years. We concluded that, while not all Chinese tactics and developments are problematic, many of them could be.”

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