Applied Materials Inc., a top US supplier of chipmaking equipment, has taken legal action against its Chinese-owned competitor, Mattson, accusing the company of engaging in a 14-month-long campaign to steal valuable trade secrets.
According to Bloomberg, Applied Materials alleged in the court filings that Mattson orchestrated an employee-poaching spree and covertly transferred semiconductor equipment designs.
The lawsuit, which has not been previously reported, highlighted the growing concerns over China's efforts to circumvent US sanctions and develop its own world-class chip industry.
Applied Materials' Lawsuit Against Mattson
Applied Materials claimed that Mattson hired 17 of its most senior engineers over the course of a year, including a senior department manager and long-time collaborators with access to sensitive information such as chipmaking processes and technology roadmaps.
The court filings revealed that Applied Materials previously sued Mattson last year and the latest employee to leave, whom the firm said has finally provided solid evidence of espionage.
In the March 2022 filing, Applied Materials said that "many of these documents" contain highly sensitive technical information, including trade secrets and know-how, that could provide Mattson with a significant competitive advantage in its technology development.
The US company noted that it is taking legal action to protect its intellectual property rights but did not provide further comments due to the ongoing litigation.
Mattson Denies the Allegations
Mattson, a Fremont, California-based company acquired and operated by Beijing E-Town Dragon Semiconductor Industry Investment Center, has denied the allegations, asserting that the claims are baseless and will be resolved in their favor.
The company argued that the initial complaint filed 16 months ago lacked evidence to support the allegations and that no evidence has emerged since then.
One of the employees implicated in the theft, Canfeng "Ken" Lai, admitted to sending documents from his Applied email address to his personal account but claimed that he did so only to retain "souvenirs" of his achievements.
Lai denied any intention to use or disclose confidential Applied information in his new role at Mattson. However, Applied Materials alleged a series of suspicious actions, including unsuccessful attempts by Lai to download data onto a USB drive and subsequently send volumes of emails to himself.
The transferred information allegedly included detailed designs and specifications for a new chamber used in deposition, a crucial step in the chipmaking process. Applied Materials emphasized that the new chamber, which enables the production of advanced high-performance chips, is the first of its kind.
Applied Materials also filed a lawsuit against unidentified individuals or corporations that allegedly helped Mattson in the misappropriation of trade secrets.
The company's investigation is ongoing, and the full extent of the defendants' involvement and potential additional wrongdoing remains unknown.
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