Posted on 03/23/2004 5:11:37 PM PST by BenLurkin
SAN JOSE, Calif. (AP) - The world's largest contract chip maker claims a China-based rival stole its trade secrets by hiring away employees and urging them to bring "presents" of proprietary information when coming to work at their new jobs, according to court documents. Taiwan Semiconductor Manufacturing Co., which handles chip-making for firms that don't have their own factories, claims Semiconductor Manufacturing International Corp. engaged in an "ongoing scheme of industrial espionage and unfair competition."
The lawsuit, originally filed in San Francisco federal court in December, alleges SMIC improperly obtained trade secrets and infringed U.S. patents. On Monday, it disclosed new evidence in response to SMIC's efforts to have the lawsuit dismissed.
Taiwan-based TSMC claims as much as 90 percent of one of its process flows - the sequence of steps to fabricate chips - had been copied by SMIC. This week's filing also said SMIC's use of stolen secrets was verified through a forensic examination of its chips.
"As a public company, we have an obligation to protect our patents and trade secrets to maintain shareholder value," said Chuck Byers, director of brand management at TSMC.
SMIC, which was incorporated in the Cayman Islands but headquartered in Shanghai, was founded in 2000 and has quickly grown to have one of China's most advanced semiconductor factories.
Catherine Zhao, a China-based SMIC spokeswoman, was not available to answer questions after hours. Previously, the company called the claims meritless.
"We want to emphasize that SMIC has strict company policy about intellectual property protection and always respects intellectual property rights of any third party," SMIC said in a statement released after the initial lawsuit was filed Dec. 18.
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