TSMC vs Samsung!

One of the trending topics in Taiwan last week is the escalating conflict between Samsung and TSMC. This time however it is of a legal nature which has been a long time coming for the semiconductor industry. Reverse engineering has been an integral part of the semiconductor business since the beginning, as has intellectual property theft. The difference being employees with prior knowledge are doing the reverse engineering and the resulting email trails are their undoing every time.

The driving force behind this of course is the demand for second source foundry manufacturing. As I have mentioned before, at 40nm and above TSMC design databases (GDS II) were given to UMC, Chartered, and SMIC for second, third, and sometimes fourth source production. At 28nm and 20nm it is much more difficult to do and at 14/16nm and 10nm it will require a copy exact strategy or a significant redesign. In fact, at 10nm you will not even be able to use the same design team for different foundries due to strict legal constraints.

Take a look at this blog about the legal action TSMC took against SMIC at 180nm and 130nm. It is an interesting story, one that will certainly have some commonality with the Samsung legal action:

TSMC versus SMIC
byDaniel Nenni
Published on 09-28-2009

The recent events surrounding the TSMC vs Sasmung legal action are detailed in this article. Please note that I have not fully fact checked this yet but will do so in the coming weeks. You should also know that this is a Taiwanese publication known for “Solid, sober reporting, CommonWealth magazine gives Taiwan’s entrepreneurs and decision-makers the insights they need to keep ahead…”

Hunting Down a Turncoat
By Liang-Rong Chen
Published: January 23, 2015

It really is a sordid story if you have the time and interest. The bottom line, as with the SMIC case, is that it alleges Samsung hastened the delivery of 14nm by using technology that they obtained from a former TSMC executive. Right now the legal action is against the former employee but that may change when the Samsung 14nm silicon is fully investigated.

“The 16nm and 14nm FinFet products that both companies will mass produce this year were even more alike. It could be hard to tell (if the product) came from Samsung or TSMC if only structural analysis is used, the report said.”

One of my former employers had a similar experience when a consultant “borrowed” code from a competitor to hasten a product delivery. The result was hundreds of millions of dollars in damages, jail time, and a forced acquisition. At one time I remember customers using the software in question were also under legal threat but fortunately cooler heads prevailed. It really is a bad idea to take legal action against customers.

The FinFET technology at the heart of today’s fierce battle between TSMC and Samsung was also one of Liang’s strengths. In its claim against Liang, TSMC stressed: “Liang Mong-song was deeply involved in TSMC’s FinFET process research, and he was the inventor behind related patents.”

According to Patent Buddy, 47 patents were filed and 15 issued between June 2001 and July 2012:

Mong-Song Liang Inventor – TSMC Patent Owner

I would be interested to know which of these patents are FinFET related if someone out there has the time, expertise, and interest to investigate. Hopefully the result of this blog will be a lively conversation in the comments section, just remember that this is but one side of a very complicated story.