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How Intellectual Property Theft Puts the Semiconductor Industry at Risk

Third in a 3 Part Series on Protecting the Semiconductor Industry.

 

Semiconductor manufacturing companies often take on unnecessary risks when they conduct business overseas. In fact, running a semiconductor manufacturing plant overseas presents 3 major risks when it comes to the reclamation of their precious metals:

    1. Theft of Intellectual Property
    2. Loss of Revenue
    3. Penalties and Fines

 

These risks, when not addressed, create significant problems that ultimately impact the overall health of the semiconductor manufacturing company.

How IP Theft Occurs

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Understanding how intellectual property theft occurs during precious metals reclamation is the third of three ways that Security Directors, Environmental Managers, & Reclaim Managers can create greater security for their semiconductor manufacturing company and the industry as a whole.

Foreign theft of American IP is estimated in the hundreds of billions of dollars. Tech companies go to great lengths to protect their intellectual property but often overlook their precious metals reclamation vendors.

While your company may already have a product destruction policy in place, many overseas countries try to keep the destroyed products, even the shred, by classifying it as hazardous waste.

These countries argue that the circuit boards fail the leachate test and would, therefore, ban the export. This keeps the product in their country for processing, allowing for the IP theft to occur. Unfortunately, the processors in that country may be enriching the local authorities to make sure the product stays in their country.

Why Is This a Risk?

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The risk to your IP is closely tied to the previous two risks:

  • If a semiconductor company prioritizes low treatment fees over metals recovered, then they hire a cheaper, overseas vendor to process their material. 
  • This cheaper, overseas vendor uses chemical-based recovery methods because they’re faster and cheaper, leaving behind valuable metal in your circuit boards and processors.
  • The metal left behind in the destroyed circuit boards and processors now qualify as hazardous waste, which is then confiscated by the overseas country, thus opening your company up to IP theft.

 

Often, this whole practice generates additional taxes and fees for your company. But the greater risk is in the theft of your IP as proprietary technology is stolen, analyzed, rebuilt, and then copied for their own profit directly from your destroyed products.

AMSC, formerly known as American Superconductor, Inc., estimated their losses for one instance of IP theft by a foreign country at over $550 million.

Protect Your Company. Reduce Your Risk

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Given the large amount of metal being processed through the semiconductor industry, the potential for IP theft is huge so you want to choose your precious metals reclamation company carefully.

If you missed any of the three parts in our series on how to protect the semiconductor industry, please visit our blog page to catch up. Or you can download our full report now.

In the full report, you’ll also learn the top 3 criteria for evaluating your precious metals reclamation company.

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