Applied Materials Sued by Chinese Chipmaker E-Town for Alleged Trade Secret Theft

China's E-Town Semiconductor Technology Co. has sued Applied Materials, a US chip-equipment supplier, for allegedly stealing trade secrets. E-Town claims that Applied Materials illegally obtained, used, and disclosed core plasma-source wafer treatment technologies. The dispute unfolds amid heightened US-China tech tensions and tariffs that could impact Applied Materials' revenue.

China's E-Town Semiconductor Technology Co. has filed a lawsuit against U.S. chip-equipment supplier Applied Materials, Inc., alleging that the latter stole trade secrets related to core plasma-source wafer treatment technologies. The dispute unfolds amidst heightened U.S.-China tech tensions and potential tariffs that could impact Applied Materials' revenue.

Beijing E-Town Semiconductor Technologies (688729.SS), backed by the Chinese government, accused Applied Materials of illegally obtaining and using its core technology secrets. The company seeks 99.99 million yuan ($13.94 million) in compensation, claiming that Applied Materials disclosed technical secrets by applying for a patent in China [1].

The lawsuit stems from a 2016 acquisition by Beijing E-Town of Mattson Technology, a California-based semiconductor wafer processing equipment designer and manufacturer. In 2022, Applied Materials sued Mattson for alleged corporate espionage, with Mattson later counter-suing with similar accusations [1].

Beijing E-Town alleged that Applied Materials hired two former Mattson employees, who were later listed as principal inventors behind a patent filed by Applied Materials in China. The patent disclosed confidential technical know-how jointly held by Beijing E-Town and Mattson [1].

The lawsuit comes against the backdrop of U.S. tariffs on China, which could cut Applied Materials' Q2 revenue by $400 million in fiscal 2025, according to analyst estimates. China remains a critical market for Applied Materials, accounting for 37% of its fiscal 2024 revenue and 27% in fiscal 2023 [2].

Analysts predict Applied Materials' Q3 earnings of $2.34 per share, a 10.4% YoY increase, and revenues of $7.2 billion, a 6.2% YoY increase. Despite recent downward revisions in EPS estimates, the company's strategic partnerships and expansions, such as investments in domestic manufacturing, underscore its commitment to technological innovation and growth [3].

References:
[1] https://www.reuters.com/legal/litigation/beijing-e-town-sues-us-firm-applied-materials-alleging-trade-secrets-leak-2025-08-13/
[2] https://www.benzinga.com/markets/tech/25/08/47115950/chinas-e-town-claims-applied-materials-poached-staff-misused-proprietary-chip-tech
[3] https://www.ainvest.com/news/applied-materials-q3-earnings-analysts-predict-10-4-eps-growth-6-2-revenue-increase-2508/