SAN JOSE, Calif., 30 April 2008. 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.

"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," says 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. Fifty-four 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," says 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."

Nearly 60 percent of the companies surveyed have taken legal action against IP violations. However, only 48 percent of them were satisfied with the outcome, citing legal processes that were slow, expensive, and unpredictable. Companies were also concerned about costs and variability in the outcome of litigation.

To address IP concerns, the white paper provides a set of recommendations to SEMI that focus on expanding public policy efforts, working with governments for global IP protection, driving customer dialogue, working with SEMI member companies to promote a global culture of respect for the industry IP assets, as well as providing IP management education to its members.