SAN JOSE, USA: Semiconductor equipment and materials suppliers face serious and mounting challenges in intellectual property (IP) protection, with adverse economic consequences for the entire microelectronics industry, according to a new white paper published by SEMI.

The report: “Innovation at Risk – Intellectual Property Challenges and Opportunities,” provides a detailed study of various IP challenges facing the equipment and materials industry and offers recommendations for improving the situation. The white paper is based on a survey of 49 SEMI member companies representing 56 percent of the total annual sales of the entire equipment and materials industry. The study was conducted by the Noblemen Group. The IP report can be downloaded from SEMI's Web site.

“Protection of IP rights is a serious area of concern for the semiconductor equipment and materials industry, which supplies critical enabling technologies to microchip manufacturers,” said Stanley Myers, president and CEO of SEMI.

The study found that increasing IP violations are driven by factors such as weak IP protection laws and weak enforcement and penalties in many regions of the world, outsourcing and off shoring in Asia, and the ongoing quest by the semiconductor industry for cost reduction in a consumer driven market.

Close to 90 percent of the companies that participated in the study reported experiencing some form of IP violation, including infringement, counterfeiting, and theft of core technologies, core products, spare parts and components, trade secrets, and trademarks. 54 percent of companies characterized these infringements as serious to extremely serious.

“In the highly competitive global business environment, IP protection is essential to the industry, allowing it to make the significant R&D investments needed to sustain technological advancement of the semiconductor device industry," said Bob Akins, chief executive officer of Cymer, Inc. and vice chairman of SEMI. IP violations of various forms undermine the development of the next generation of equipment and materials required to meet the challenges of Moore’s Law.”

"Semiconductor equipment and materials companies offer complex and advanced systems to a highly specialized market. Continued violations of IP could undermine the development of new equipment and materials for the next generation semiconductor devices," said Tetsuro "Terry" Higashi, chairman and CEO of Tokyo Electron.

These companies identified Taiwan, China, Korea, and North America as regions of the greatest concern. However, the form and nature of IP violations in each region vary and occur for different reasons, especially in the case of North America. In addition, about 53 percent of the companies report IP violations by their customers (i.e., chipmakers).