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TSMC files ‘verification’ of SMIC spy claim

Trade secret theft charges backed by 'eyewitnesses'

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TSMC has beefed up its industrial espionage action against fellow chip foundry SMIC with what it claims are eyewitness accounts of its rival's alleged attempts to steal its trade secrets.

The world's largest chip foundry filed "eyewitness affidavits and new technical verification of trade secret misappropriation by SMIC" with the US District Court of Northern California this week.

TSMC began its legal battle with SMIC last December, when it filed a complaint with the California court claiming its rival attempted to persuade employees to spill the beans on the company's 180nm process technologies. It alleges SMIC tried to do the same thing with staff it had hired away from TSMC.

SMIC has poached staff from Taiwanese foundries, in order to grow its own skills-base. Claims that such staff have brought more with them than their individual chip-making expertise are not uncommon in the region. TSMC and its arch-rival, UMC, have both made such allegations about each other in the past. SMIC has hired staff from both companies.

SMIC denies TSMC's claim. Last month it asked the court to dismiss TSMC's action. TSMC's latest filing is a direct response to that request, and it certainly sounds damning.

The affidavits include testimony from "former SMIC engineers who personally witnessed SMIC's misconduct", TSMC says, adding: "One witness estimated that 90 per cent of SMIC's 180nm logic process was copied from TSMC.

"Other witnesses declared that SMIC attempted to disguise the origin of the information by internally referring to TSMC and its technology by the code name 'BKM1', referring to 'Best Known Method 1'. Still another sworn statement reveals that SMIC's use of TSMC technologies was 'no secret' and was openly discussed by SMIC engineers," TSMC claims.

"The most recent filing also states that TSMC verified SMIC's use of stolen trade secrets through forensic examination of an SMIC manufactured device bought on the open market," the foundry continues.

"That chip contains features that are strikingly similar to TSMC's, but bearing little similarity to comparable features in a chip made by Chartered Semiconductor, SMIC's only reported licensor of 180nm logic processes." ®

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