Tokyo Electron has removed a veteran executive who helped build its dominant presence in China's semiconductor market after discovering his family ties to emerging domestic competitors. Jay Chen, who ran the Japanese company's China operations until last year, was replaced in February 2025 after Tokyo Electron learned of his wife's investments in two Chinese startups now developing rival chipmaking tools.

Corporate filings reveal Chen's wife Takako Ohtori held stakes in Suzhou WST Semiconductor Technology, which initially serviced Tokyo Electron's equipment before pivoting to develop its own tools—including track systems where the Japanese company commands roughly 90% of the global market. A separate venture, Britech Semiconductor Equipment, directly acknowledged leveraging Chen's position at Tokyo Electron in investor materials, stating his role could bring "various resources and benefits" including support from industry and local governments.

The episode illustrates the growing challenges facing foreign chip equipment suppliers as Beijing pours billions into building a self-sufficient semiconductor industry. Tokyo Electron said it found no evidence of technical information leaks requiring government reporting and does not anticipate any impact on its market position.