April 18, 2019 / 3:00 AM / 7 months ago

UPDATE 1-ASML rejects Samsung's involvement in IP theft case with rival

(Recasts with ASML comments)

By Toby Sterling and Ju-min Park

AMSTERDAM/SEOUL, April 17 (Reuters) - ASML Holding NV denied on Wednesday any involvement by its top client Samsung Electronics Co Ltd in an intellectual property theft case between the Dutch chip equipment maker and a competitor.

ASML last week disclosed that former employees took company secrets to U.S. software maker Xtal Inc, which is funded by entities in South Korea and China and set up to sell a competing product to an existing ASML customer in South Korea.

Speculation of Samsung's involvement was raised in media reports partly due to the South Korean firm's partnership with Xtal, which filed for bankruptcy in December after losing a $223 million judgement to ASML over the matter.

"What we have found evidence for is that the (secrets) were stolen by people of American and Chinese nationality with Chinese background," ASML Chief Executive Peter Wennink said in a TV interview with Dutch broadcaster NOS on Tuesday.

"Those products were used to provide services to our largest Korean customer," he said, referring to Samsung, which is also ASML's largest customer overall.

Samsung, in an emailed response to questions from Reuters, said on Wednesday it was not involved in the industrial espionage.

"We are deeply disappointed at media reports that had widely assumed or even suggested Samsung's involvement in any wrongdoing against ASML, which are not true."

"While we cannot disclose details of our business deals, Samsung had made precautions so as to adhere to all laws and regulations with its development contract with Xtal, including a clause that specifically prohibits the illegal use of third-party IP," it said, referring to intellectual property (IP).

ASML also denied Samsung was involved in the theft.

"ASML fully agrees with Samsung's response that it is very disappointed about the untrue media reports which assume or even suggest that Samsung is involved in any malicious actions against ASML," the Dutch firm said in a statement on Wednesday.

It also denied direct involvement of China's government, as also referenced in media reports.

China is a key growth market, and the primary reason behind a bullish 2019 forecast from ASML on Wednesday, along with better-than-expected first-quarter earnings. (Reporting by Toby Sterling in AMSTERDAM and Ju-min Park in SEOUL; Editing by Miyoung Kim and Christopher Cushing)

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