A former executive at Samsung Electronics, one of South Korea’s leading tech companies, has been indicted on charges of stealing company technology to establish a rival chip factory in China. The defendant, who also worked as a vice president at SK Hynix, another prominent chipmaker, is accused of illegally obtaining Samsung’s data with the intention of constructing a copycat facility just 1.5 km away from a Samsung chip manufacturing plant in Xian, China.
Six Others Charged in Connection with Chip Technology Espionage
Prosecutors have estimated that the theft of data has resulted in losses worth at least $233 million for Samsung Electronics. This incident is viewed as a significant threat to national economic security, as South Korea’s chip industry faces intensifying competition amid the ongoing rivalry between the United States and China.
The defendant, who was arrested last month, denies the allegations made against him. The trial date is yet to be confirmed by the court handling the case. Prosecutors have also indicted six other individuals believed to be involved, including an employee from an inspection company accused of leaking Samsung’s semiconductor factory’s architectural plan.
This development comes at a time when South Korea is actively supporting its chip sector. Both Samsung Electronics and SK Hynix, the world’s top two memory chip manufacturers, have invested heavily in chip factories in China. While these companies rely on U.S. technology and equipment, approximately 40% of South Korea’s chip exports are directed to China.
Although China initially lagged behind in memory chip production, its firms have quickly caught up to South Korean competitors. Analysts estimate that the technology gap between NAND Flash chips produced by China’s YMTC and industry leaders like Samsung Electronics and SK Hynix is now only two years or less.
To prevent technology leaks, South Korean companies typically develop cutting-edge chips in their home country before manufacturing them in their Chinese factories after a year or so. South Korea has been increasingly cracking down on corporate spying in recent months, as evident from the recent arrests of 77 individuals involved in 35 cases of suspected industrial espionage across various sectors.
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