Taiwanese court rules former TSMC employee shared stolen secrets with Samsung

Earlier this year, we covered the case of Liang Mong-song, a former TSMC engineer who stood unofficially accused of corporate espionage. Not long after we wrote the story, TSMC elected to file a lawsuit against Mong-song, and the Taiwan Supreme Court has now ruled in favor of the foundry company and against the engineer. Mong-song left TSMC and went to Samsung, not long before Samsung’s foundry plans took a significant leap forward.

“Liang has to quit working for Samsung from now until the end of this year,” TSMC Director of Corporate Communications Elizabeth Sun said in a telephone interview with EE Times. TSMC may file more lawsuits against Liang in the future, she said.
TSMC hasn’t commented on whether it would file suit against Samsung itself, and Samsung has declined to comment on the case between Liang and TSMC. As we wrote in February, Samsung’s 14nm leap caught a number of industry experts off-guard. TSMC has led the pure-play foundry business for years and consistently been the first manufacturer ready on a new node. When GlobalFoundries launched it dreamed of catching TSMC at 28nm and beating it to next-generation products, only to see those hopes founder. Now, GF has licensed Samsung’s foundry technology and agreed to serve as a second source for Samsung orders. That leaves Samsung sitting in the driver’s seat — a position TSMC is keen to reclaim.

TSMC makes money from multiple nodes, but the leading edge is the most valuable per wafer.

The reason TSMC is fighting so hard to reclaim first mover advantage is simple — hitting the first iteration of a node gives the foundry is critical to the company’s bottom line. As new nodes become ever more expensive, it’s more important to capture profits from the bleeding edge. Whether TSMC wants to sue Samsung to reclaim it, however, is another matter altogether. Any lawsuit around alleged IP theft at the 28nm node would likely take years to wend its way through the court system. Samsung and TSMC would likely be slugging it out at the 10nm or 7nm node before we saw any court decision around what happened at 28nm. There’s also the matter of proof. Liang Mong-soon had signed a non-compete agreement with TSMC, which makes it relatively easy to punish him for breaking it. Proving that he took information to Samsung or that the Korean firm illegally enriched itself at TSMC’s expense is a much higher bar. However intelligent he is, Mong-song is just one individual, and Samsung likely has hundreds of engineers working in its fabs.