TSMC Wins Case Against Former Employee Who Disclosed Classified Information to Samsung

Photo Credit:AP/ 達志影像
Why you need to know

After his non-compete clause ended in February of 2011, Liang Meng-song collected the obligated NT$ 46,000,000 (approximately US$ 1.4 million) worth of stock dividends and was employed at Samsung in July the same year. But TSMC suspected Liang of leaking classified information to Samsung and appealed to forbid him to work for Samsung until the end of this year.

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Former senior director of R&D at Taiwan Semiconductor Manufacturing Company Ltd. (TSMC) Advanced Modules Technology Division, Liang Meng-song, has been accused of disclosing classified information to Samsung Electronics.

On August 24, the Supreme Court maintained the ruling of the Intellectual Property Court and sentenced Liang with three prohibitions, including banning him from working for Samsung until the end of 2015.

In January this year, CommonWealth Magazine published a feature, “Hunting Down a Turncoat," and mentioned that Morris Chang, founding Chairman of TSMC, admitted in 2014 that the company’s 16-nanometer technology has been surpassed by Samsung, which led to the plummeting of TSMC stock shares and ratings.

According to the report, Chang was prepared to produce the FinFET technology (Fin Field-Effect Transistor) in the second half of this year and implement it in the latest manufacturing process of the 16-nanometer. But Samsung had already begun mass producing chips of the same technology in December of 2014. This was the first time in nearly ten years that TSMC was lagging behind Asian companies of the same trade, and the resigning of Liang played an important role.

Apple Daily reports, Liang holds a doctoral degree in electrical engineering from the University of California, Berkeley. He started working at TSMC 23 years ago and was a champion in the R&D department. The company developed a 130 nanometer copper manufacturing process 12 years ago and defeated IBM. Liang had a hand in this and was also involved in around five hundred patented inventions at TSMC.

Liang left TSMC in 2009 and started teaching at the Sungkyunkwan University, which is sponsored by Samsung, in Korea the very next year. After his non-compete clause ended in February of 2011, Liang collected the obligated NT$ 46 million (approximately US$ 1.4 million) worth of stock dividends and was employed at Samsung in July the same year. But TSMC suspected Liang of leaking classified information to Samsung and appealed to forbid him to work for Samsung until the end of this year.

China Times reports, TSMC requested the court:

1. Liang can not disclose any business information he obtained during his time at TSMC.
2. Liang can not disclose any information related to TSMC’s R&D department to Samsung Electronics.
3. Liang is prohibited from working for Samsung Electronics in any form until December 31, 2015.

Initially, the Intellectual Property Court decided at the first instance TSMC had lost the lawsuit against Liang. The TSMC appealed and won all the cases at the second instance. Liang then appealed to the Supreme Court and was dismissed the case on August 24. The judge decided in favor of TSMC in all cases with Liang.

Liberty Times reports, the Supreme Court adopted the analysis report conducted by third party experts regarding the key structure in the production process of TSMC, Samsung and IBM. The report states the differences between Samsung and TSMC decreased rapidly in the 45, 32, 28-nanometer generations. The P-type germanium and silicon compound of the transistor in the 28-nanometer production process at Samsung is also similar to the diamond structure of TSMC.

Moreover, the FinFET that both companies planned to mass-produce this year might bear significant resemblances. Samsung has obtained even the most difficult technique features as unique as fingerprints.

The court believes after Liang resigned from TSMC, he taught in the semiconductor institute of technology under the Sungkyunkwan University, which is part of the training system of the Samsung enterprise. The school is located at the Samsung site. Liang replies to the allegation and says he did not know he was teaching Samsung employees until he saw the TSMC report.

UDN reports, Gu Li-xiung, Liang’s lawyer says that no matter how people see Samsung, Liang is just a lonely genius desolated by TSMC and had no choice but to leave the company. In this case, Liang is just pursuing his constitutional right to work.

Chen Ling-yu, appointed lawyer of TSMC, says this case will be significant in both judicial history and cases regarding trade secret protection. In this case, the TSMC plays a significant role in the semiconductor industry in Taiwan. In order to prevent the intellectual property of Taiwan from being drawn out, making the most use of the Trade Secret Law to protect Taiwanese technology is crucial.

Translated by June and Olivia Yang
Edited by Olivia Yang

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