TAIPEI — Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest chip foundry, is suing a former R&D employee on the suspicion that he leaked secrets including but not limited to 28 nm process technology to Samsung. South Korea’s largest company is a growing competitor in the foundry business.
“We brought the lawsuit because TSMC Chairman Morris Chang and senior management were convinced we needed to send a message to Samsung, employees and other competitors,” Dick Thurston, former chief counsel for TSMC, told EE Times. “The initial technology they focused on was 28 nm.”
The suspected leak of technology may have helped Samsung catch up with TSMC in leading-edge 14 nm FinFET chips that foundry customers such as Qualcomm and Apple are designing for next-generation mobile devices. When TSMC launched its 28 nm products in 2012, the company went unchallenged in that technology node for nearly two years. Any advantage Samsung may have gained over TSMC is very short term, according to Thurston.
Analysts say that given TSMC’s technology leadership, they were surprised when Samsung came abreast of TSMC in FinFET chips, the first of which are expected to be commercially available this year.
“Go back to what (TSMC Chairman) Morris Chang said in the middle of last year,” Mehdi Hosseini, an analyst with Susquehanna International Group, said to EE Times. “He said we’re going to lose market share in 2015 and regain it in 2016. The comment speaks volumes. This is well before any samples were out from Samsung.”
Focus of case
There have been two trials with decisions favorable to TSMC. The most recent decision came from Taiwan’s Intellectual Property Court at the end of April 2014, Thurston said. That has been followed by an appeal to Taiwan’s Supreme Court.
The legal dispute has focused on Liang Mong-song, a former senior director of R&D at TSMC’s Advanced Modules Technology Division. More recently, Liang was Samsung’s System LSI division chief technology officer for three and a half years, according to a report by Taiwan’s Commonwealth magazine.
TSMC Director of Corporate Communications Elizabeth Sun declined to comment other than to say that the case is pending in Taiwan’s Supreme Court.
Samsung also had little to say.
“Samsung strives to adhere to all applicable legal and ethical standards,” public relations firm Edelman responded to EE Times, conveying a message from Samsung. “As we are not a party to the litigation between TSMC and Liang Mong-song, we do not believe it would be appropriate to comment.”
TSMC may have decided not to sue Samsung owing to the South Korean chaebol’s size, according to the Commonwealth article. Samsung Electronics Co.’s market capitalization of $224.6 trillion won ($210 billion) is nearly double that of TSMC’s $119 billion. The Samsung group of nearly 80 companies account for about 20 percent of South Korea’s economy, making everything from armored vehicles and weapons for South Korea’s military to oil tankers and household appliances, according to Bloomberg.
Liang was working for Samsung-affiliated Sungkyunkwan University as a professor while he was leaking secrets to Samsung, according to the Commonwealth article.
“Samsung, while not directly sued, was involved in the case because it likely supported Liang in the hiring of his lawyers and filing of several affidavits in support of him,” Thurston said.
Next page: Implications
The case of Liang Mong-song vs. TSMC is quite interesting. TSMC must have had some strong evidence that he took company secrets with him to Samsung. Otherwise, whatever he carried in his head as state-of-the-art knowledge on advanced node semiconductor technology may not be claimed by TSMC depending on where the case is prosecuted. California for example does not have any non-compete clauses that typicall restrict employees working at competitions for X number of years (typically 1 to 2 years).
MP Divakar