Tokyo Electron (TEL) has fully severed ties with Jay Chen, its longtime executive who built TEL’s China business. The reason: his family’s investment network was tied to two local Chinese equipment startups – Suzhou WST and Britech Semiconductor.

Suzhou WST began developing its own coat/develop track (TEL’s core monopoly with 90% global share) as early as 2022. Chen’s wife held shares in a fund that was a founding investor in WST; Chen himself was a co‑founder of Britech.

TEL launched an internal probe in fall 2024, stripped Chen of all roles by February 2025, and let his contract expire in September 2025. The company is now willing to sacrifice China revenue (down from 40% to 30%) to protect its IP.

TEL is spending ¥1.5 trillion ($10B) over five years on R&D, hiring 10,000 engineers, and operating a new center in Miyagi that triples development speed. AI equipment sales now target 40% of revenue, offsetting China losses.

For China, the localization rate for coat/develop tools remains below 5% . The “Jay Chen model” of using expat executives to funnel technology is now dead. Domestic fabs have launched a 28nm joint development push – but the technology gap remains wide.

ICgoodFind : TEL’s hardline move closes a major tech transfer channel. Domestic coat/develop tools face an uphill battle.