TSMC Ex-Employee Charged with Smuggling 16nm and 10nm IP to HLMC

[btarunr]

A former employee of TSMC, Taiwan's premier silicon fabrication foundry, has been charged with stealing trade-secrets to his next employer across the straits. Mentioned as "Chou" by DigiTimes, the employee has been charged with IP theft and smuggling trade-secrets of vital 10 nanometer and 16 nanometer silicon fabrication technologies over to his next job at Shanghai Huali Microelectronics (HLMC).

Before Chou could flee TSMC to HLMC, he was arrested by Taiwan Police, and indicted for breach of trust. With the matter now in the hands of the applicable District Prosecutors' Office, it has become subjudice and TSMC isn't issuing comments. Development of 10 nanometer (and newer) silicon fabrication nodes is proving exceedingly costly and painstaking for foundry companies, and it hurts their future just that much worse when someone does away with billions of dollars worth R&D.



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[brian111]

Looks like China is really going for that 2025 plan.

 

[Metroid]

Looks like China is really going for that 2025 plan.

It would not surprise me given how messed up the whole thing has become.

 

[Flanker]

adding to a already long list. TSMC has serious issues with staff loyalty.

 

[brian111]

adding to a already long list. TSMC has serious issues with staff loyalty.

I think it has a lot to do with greed. They get offered large cash bonuses and top positions for delivering valuable IP.

 

[Vayra86]

adding to a already long list. TSMC has serious issues with staff loyalty.

Or China doesn't really care much about playing fair against one of its main opponents; successful businesses in Taiwan, a 'province' that just won't become a province of China.

 

[Assimilator]

Taiwan simply needs to make espionage a capital crime and execute one person for it, and all of a sudden these sort of problems will stop. Hell, I would be surprised if TSMC and the other big boys don't already have their own "internal affairs departments" that perform the same sort of investigation and... dissuasion of thieves.

 

[the54thvoid]

Taiwan simply needs to make espionage a capital crime and execute one person for it, and all of a sudden these sort of problems will stop. Hell, I would be surprised if TSMC and the other big boys don't already have their own "internal affairs departments" that perform the same sort of investigation and... dissuasion of thieves.

Capital punishment is exactly that, a punishment. It's not a great preventative tool. If the reward of the crime is high enough, the slim chance of being caught is deemed worth the risk.

 

[StrayKAT]

Taiwan simply needs to make espionage a capital crime and execute one person for it, and all of a sudden these sort of problems will stop. Hell, I would be surprised if TSMC and the other big boys don't already have their own "internal affairs departments" that perform the same sort of investigation and... dissuasion of thieves.

That's pretty hardcore. Execution for theft? Maybe if it was Malaysia.

The root of the problem is China itself. The whole country needs to be blacklisted and shut out of the world economy. Like the Russians of the 90s, Communists in China simply don't understand the concept of ownership or property... yet we let them loose on a world established on that idea. They're almost like little kids.

 

[Ahhzz]

Taiwan simply needs to make espionage a capital crime and execute one person for it, and all of a sudden these sort of problems will stop. Hell, I would be surprised if TSMC and the other big boys don't already have their own "internal affairs departments" that perform the same sort of investigation and... dissuasion of thieves.

I think that would make it hard for even our government (much less #45) to stick with our tenuous connection to Taiwan if they start going to extremes like that...

 

[jsfitz54]

I think I have some reading to do:

 

[Assimilator]

That's pretty hardcore. Execution for theft? Maybe if it was Malaysia.

There's theft, and then there's espionage. In this case it's not just industrial espionage, it reaches across political borders - the leak of 10nm or even 16nm manufacturing know-how would give China a massive boost. They'd start grabbing semiconductor orders from Taiwan (because China is ALWAYS cheaper), which would weaken Taiwan's economy and hence the USA. Even Trump, in all his brilliance, would be able to grasp those ramifications.

The root of the problem is China itself. The whole country needs to be blacklisted and shut out of the world economy. Like the Russians of the 90s, Communists in China simply don't understand the concept of ownership or property... yet we let them loose on a world established on that idea. They're almost like little kids.

It's less to do with communism and more to do with Eastern culture, which puts a bigger focus on sharing (collaboration) as opposed to competing: they don't see stealing IP as theft, in fact the concept of one person/company/organisation "holding" knowledge is against their beliefs. Unfortunately, when this cultural mindset runs up against capitalism/Western, there are problems.

 

[jsfitz54]

There's theft, and then there's espionage. In this case it's not just industrial espionage, it reaches across political borders - the leak of 10nm or even 16nm manufacturing know-how would give China a massive boost. They'd start grabbing semiconductor orders from Taiwan (because China is ALWAYS cheaper), which would weaken Taiwan's economy and hence the USA. Even Trump, in all his brilliance, would be able to grasp those ramifications.



It's less to do with communism and more to do with Eastern culture, which puts a bigger focus on sharing (collaboration) as opposed to competing: they don't see stealing IP as theft, in fact the concept of one person/company/organisation "holding" knowledge is against their beliefs. Unfortunately, when this cultural mindset runs up against capitalism/Western, there are problems.

So Chinese currency is traded world wide? So much for world collaboration. DOUBLE STANDARDS. China steals and the world knows it. They only want to play by their rules.

 

[R0H1T]

Or China doesn't really care much about playing fair against one of its main opponents; successful businesses in Taiwan, a 'province' that just won't become a province of China.

They don't play fair with anyone, end of

Between IP theft, corporate espionage & state sponsored hacking it's pretty clear what China is all about. Worst of all they revel in it, I know badmouthing a whole nation for actions of the few (or too many in this case) is wrong but I'll make an exception for China

There's theft, and then there's espionage. In this case it's not just industrial espionage, it reaches across political borders - the leak of 10nm or even 16nm manufacturing know-how would give China a massive boost. They'd start grabbing semiconductor orders from Taiwan (because China is ALWAYS cheaper), which would weaken Taiwan's economy and hence the USA. Even Trump, in all his brilliance, would be able to grasp those ramifications.



It's less to do with communism and more to do with Eastern culture, which puts a bigger focus on sharing (collaboration) as opposed to competing: they don't see stealing IP as theft, in fact the concept of one person/company/organisation "holding" knowledge is against their beliefs. Unfortunately, when this cultural mindset runs up against capitalism/Western, there are problems.

By east do you mean far east? Because there's nearly 2 billion people slightly to the west who don't think the same!

 

[windwhirl]

That's pretty hardcore. Execution for theft? Maybe if it was Malaysia.

The root of the problem is China itself. The whole country needs to be blacklisted and shut out of the world economy. Like the Russians of the 90s, Communists in China simply don't understand the concept of ownership or property... yet we let them loose on a world established on that idea. They're almost like little kids.

It's unlikely, though. China has veto power in the UN, and then you have multiple countries that have bilateral agreements with them. I know my own country wouldn't stop trading with them unless there is a extremely good reason (and that means only war or an impossible UN Security Council resolution, as far as I know), and there are many others that will follow the same reasoning.

In fact, should the impossible happen (banning China), they will probably lash out. And the first target will be Taiwan, probably.

So, it would have to be something more subtle. Like import tariffs.

Anyway, not a surprise this happened. They don't go to war with Taiwan because there would be unwanted consequences...

 

[StrayKAT]

There's theft, and then there's espionage. In this case it's not just industrial espionage, it reaches across political borders - the leak of 10nm or even 16nm manufacturing know-how would give China a massive boost. They'd start grabbing semiconductor orders from Taiwan (because China is ALWAYS cheaper), which would weaken Taiwan's economy and hence the USA. Even Trump, in all his brilliance, would be able to grasp those ramifications.



It's less to do with communism and more to do with Eastern culture, which puts a bigger focus on sharing (collaboration) as opposed to competing: they don't see stealing IP as theft, in fact the concept of one person/company/organisation "holding" knowledge is against their beliefs. Unfortunately, when this cultural mindset runs up against capitalism/Western, there are problems.

I'll agree on some aspects of the collaborative mindset (before Communism, Confucianism was pervasive. I suppose the mindset still plays into this), but I'm part Eastern (Thai). They're not necessarily like that. I don't want to say they're more Buddhist, but perhaps they are. And Buddhism clearly recognizes theft (as well as willing generosity. It's one of the Buddha's "right actions" and considered remarkable. Rather than something you should simply expect from people... which is kind of a thief's reasoning).

 

[Octopuss]

Capital punishment is exactly that, a punishment. It's not a great preventative tool. If the reward of the crime is high enough, the slim chance of being caught is deemed worth the risk.

It is. In a way at least. I assume vast majority of people who would think about commiting a crime wouldn't actually do it if they knew capital punishment was possible. That's why I am a strong proponent of it - even if it wasn't actually performed (more than once a decade or something). It should exist as prevention.

 

[Casecutter]

The biggest problem is education in China... plagiarize, and paying graft goes a lot farther than free-thinking, and belief in one's own investigative/creative nature can provide personal reward.

 

[sepheronx]

I don't expect many people are well informed in politics when I go to a tech site, but this is rather......scary on bad info.

I'll just leave a note to most of you - China has capital punishment for corruption. Believe it or not, it didn't drop corruption much at all. It just made the initial payments in terms of bribes just that much more expensive. But there are still countless amounts of people involved in corruption cases. In China. Where you get shot.

As for Intellectual property or outright corruption, to blame China and somehow Russia of the 90's is just....bad. First off, US doesn't believe in it either if it suits their interest, hence why they would all of a sudden acquire assets from Russia at prices as large as 1 kopek, yet the industry produces millions in dollars of products. Like how Khordokovsky ended up in jail and then exiled cause of trying to sell off Russian oil assets at kopeks price to major British oil companies. Only reason why he is loved by the west, is his hatred for getting caught in the corruption.

How do you think South Korea ended up so mighty with its big 4 companies? It wasn't honesty.

This is part of the game of life. The guy in Taiwan decided to take a risk, and he got caught. Do you know how many people out here in Canada get caught for corruption? lots. Doesn't change anything in the end. No matter the punishments you can provide, people will still do it.

 

[StrayKAT]

As for Intellectual property or outright corruption, to blame China and somehow Russia of the 90's is just....bad.

The results speak for themselves.

I don't know why it'd be such an alarming opinion. I'm just talking about transitioning... to a capitalist mindset. That doesn't happen overnight. I think there's growing pains and the early period could be like the wild west or something (although I compared them earlier to "kids". It's kind of like that too.. where a toddler is out control picking up and messing with every object like it's theirs, if left to himself). If you want to take them seriously as actual business partners, that's your problem. I don't think even the Western business world does that. They only tolerate it because of cheap labor.. which is even worse on the West's part. I almost think there's an naivete and lack of seriousness to China's proclivity to theft.. while the West is consciously and habitually evil.

 

[sepheronx]

Yet even with the so called theft, companies are still fine manufacturing in China cause their own brand new carries more weight in the end than the products that are stolen.

Plus as you said, complacency with low wages. Which in turn makes the businesses willing to ignore the issue.

Apple IP stolen years ago yet apple still outperforms. And still hides money, hundreds of billions of it. They still charge 1,300% markup for a product that cost them $50 to make in China.

We can rage all we want. But we created this very system used which others now are taking advantage of like we took advantage of prior.

 

[R0H1T]

Yet even with the so called theft, companies are still fine manufacturing in China cause their own brand new carries more weight in the end than the products that are stolen.

Plus as you said, complacency with low wages. Which in turn makes the businesses willing to ignore the issue.

Apple IP stolen years ago yet apple still outperforms. And still hides money, hundreds of billions of it. They still charge 1,300% markup for a product that cost them $50 to make in China.

We can rage all we want. But we created this very system used which others now are taking advantage of like we took advantage of prior.

Oh come one iphone's BoM is just $50 or are we not paying Samsung, QC or Intel anything for any of their parts & Hon hai for their labor? Are you just counting the shipping charges or what

 

[Vayra86]

Oh come one iphone's BoM is just $50 or are we not paying Samsung, QC or Intel anything for any of their parts & Hon hai for their labor? Are you just counting the shipping charges or what

Whether 1300% or 130%, the gist of it doesn't change and he's quite correct. We are keen to point the finger at corruption elsewhere and are keen to be blind for what happens right under our noses. We are hypocrites like that.

 

[StrayKAT]

Yet even with the so called theft, companies are still fine manufacturing in China cause their own brand new carries more weight in the end than the products that are stolen.

Plus as you said, complacency with low wages. Which in turn makes the businesses willing to ignore the issue.

Apple IP stolen years ago yet apple still outperforms. And still hides money, hundreds of billions of it. They still charge 1,300% markup for a product that cost them $50 to make in China.

We can rage all we want. But we created this very system used which others now are taking advantage of like we took advantage of prior.

Yes, unfortunately.. for them it's worth it. The price of admission. But not worth it for anyone else.

 

[Flanker]

Sinophobia is real here