ASML Holdings, the world’s largest supplier of lithography machines used in manufacturing chips, has alleged that a Chinese company could be infringing on its intellectual property (IP) rights. The Dutch firm, which has a monopoly on advanced lithography tools for making cutting edge semiconductors, said in its annual report on Wednesday that a business associated with XTAL, which it previously sued for trade secrets theft in the US, was “actively marketing products in China that could potentially infringe on ASML’s IP rights”. ASML said it has asked its customers not to encourage the alleged IP infringement by Beijing-based Dongfang Jingyuan Electron Ltd, and that it also raised the issue with Chinese authorities. Leading China chip company added to US trade watch list Established in 2014, Dongfang Jingyuan is one of the “little giants” named by the Chinese government, lesser known start-ups that are pursuing technological breakthroughs to help the country achieve its goal of self sufficiency in technology. Calls to the company seeking comment went unanswered. ASML China did not immediately respond to a request for comment. In July 2021, Dongfang Jingyuan sold a critical dimension scanning electron microscope to Semiconductor Manufacturing International Corp (SMIC), China’s largest chip foundry, according to its website. Company chairman Yu Zongqiang said Dongfang Jingyuan has achieved breakthroughs in key technologies for chip manufacturing “at a time when the country needs it”, according to a statement on its website. ASML said in its annual report that Dongfang Jingyuan was associated with XTAL, which in 2019 was ordered by a US court to pay ASML US$845 million as compensation for stolen trade secrets. However, ASML said it was unable to collect the money because XTAL filed for bankruptcy. Under the settlement agreement, ASML became owner of most of XTAL’s IP after it went out of business. ASML’s allegation comes as China is doubling down on developing its own capability in lithography, which is a vital step for chip production. ASML’s most advanced lithography systems, known as extreme ultraviolet (EUV) machines, are banned from being sold to China’s top chip makers under US trade sanctions. The export ban has hindered SMIC’s development of chipmaking nodes below 10-nanometres, and forced in part its decision last year to focus on the more mature 28-nm technology nodes. ASML reported sales of 18.6 billion euros (US$21.25 billion) in 2021 compared with around 14 billion euros the year before. In China, ASML’s sales last year grew 18 per cent year on year to 2.74 billion euros, up from 2.32 billion euros in 2020. Dongfang Jingyuan does not publish its financial figures, but its press releases have stated that annual sales surpassed 100 million yuan (US$15.7 million) in 2021.