TSMC Prosecutes Ex-Employee for Leaking Secrets

　　Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest chip foundry, said it is prosecuting a former employee for leaking intellectual property in its second such case in the past five years.

　　The employee, who TSMC only identified by his surname, Hsu, printed out what the company called an “abnormal volume” of documents related to the company’s 28nm process technology. The employee also said he planned to resign from TSMC and join rival foundry Shanghai Huali Microelectronics Co. (HLMC).

　　The case is the second major incident involving leaks of TSMC intellectual property in the past five years. In 2015, TSMC won a lawsuit against Liang Mong-song, a former senior director of R&D who later became Samsung's System LSI division chief technology officer.

　　“We are a target because we are a technology leader,” said Elizabeth Sun, senior director of TSMC Corporate Communications, in a phone interview with EE Times.

　　Both legal cases involve TSMC’s cash cow 28nm technology, a node that the company has dominated for nearly six years. The suspected leak of technology to Samsung may have helped the TSMC rival catch up and surpass TSMC in leading-edge 14-nm FinFET chips that foundry customers such as Qualcomm are making for next-generation mobile devices.

　　TSMC said it will notify HLMC that any effort to use stolen trade secrets will be prosecuted to the fullest extent of the law.

　　“We will use all legal means to protect our trade secrets and intellectual property, Sun said.”

　　The latest case, which has yet to be decided by the Taiwan legal system, was initiated on May 2. Penalties could include a jail sentence, according to Sun.

　　More than a decade ago, TSMC won a legal battle with another Chinese foundry, Semiconductor Manufacturing International Corp. (SMIC), for violating intellectual property. In 2005, the two reached a settlement under which SMIC agreed to pay TSMC $175 million, partly as compensation for using TSMC patents.

　　TSMC is plugging gaps in protection of intellectual property that is vital to customers ranging from Altera to Xilinx, according to Sun.

　　Even so, former employee Liang has resumed his work with Samsung after legal restrictions ended a few months ago, according to Sun.

　　Samsung now appears to be about a quarter ahead of TSMC with the ramp of 10-nm process technology, according to a veteran chip analyst.

　　Earlier this year, Samsung and TSMC said that they would launch 10-nm foundry services during the second quarter this year for customers such as Qualcomm, MediaTek, and Huawei’s semiconductor subsidiary, HiSilicon. Qualcomm is the first company out of the gate with 10nm chips on the market.