Former Samsung Electronics executive has been arrested and charged for allegedly stealing secrets in an attempt to set up a “copycat” version of the company’s semiconductor factory in China, Yonhap news agency reported.
The Suwon District Prosecutors Office announced on June 12 that it arrested the executive and indicted him on charges of violating the Industrial Technology Protection Act and the Prevention of Unfair Competition Act, and indicted a total of six people including five employees of the company he set up in China and one employee of a Samsung Electronics cooperative for leaking design drawings.
According to the report, the executive is suspected of improperly obtaining and using Basic Engineering Data, process flow charts, design drawings and other information from Samsung Electronics semiconductor plants from August 2018 to 2019. The technology involved is a process for manufacturing dynamic random access memory (DRAM) and flash memory chip (NAND) below 30 nanometers, which belongs to the national key technology.
After investigation, the executive was found to be trying to build a “copycat” Samsung chip factory just 1.5 kilometers away from Samsung Electronics’ semiconductor factory in Xi ‘an. Construction of the plant never actually got off the ground because a promised 8 trillion won (about 44.3 billion yuan) investment from a Taiwanese electronics manufacturer fell through. However, it is reported that he received 460 billion won to build a semiconductor manufacturing plant in Chengdu. The research and development building was completed last year, and samples were produced using Samsung Electronics semiconductor technology.
The suspect is an influential figure in the semiconductor manufacturing industry in Korea, having served as executive director of Samsung Electronics and vice president of SK Hynix. After he set up a factory in China, he hired 200 employees of Samsung Electronics and SK Hynix and instructed them to obtain and use Samsung Electronics semiconductor design materials. Prosecutors estimate that the leaked technology caused at least 300 billion won (about 1.662 billion yuan) in losses to Samsung Electronics.