A former executive of Samsung Electronics is accused of stealing trade secrets from the electronics giant. South Korean prosecutors allege that the ex-executive utilized the confidential data to attempt the creation of a similar semiconductor plant in China. The defendant, a 65-year-old industry veteran who had also been employed by Korean chipmaker SK Hynix, faces charges of violating industrial technology protection laws.
The accusation stipulates that from 2018 to 2019, the ex-Samsung official used the stolen data to establish a duplicate of Samsung’s semiconductor plant. Interestingly, the intended location was reportedly a mere 1.5 kilometers away from Samsung’s chip factory in Xi’an, China. However, the copycat chip plant project allegedly hit a roadblock when an undisclosed Taiwanese company, initially backing the endeavor, withdrew its proposed investment exceeding $6 billion.
Undeterred by this setback, the former Samsung executive reportedly secured funds from investors in China and Taiwan. These resources were then used to manufacture trial chip products based on Samsung’s technology. As the charges surface, they add to the growing tension between the U.S. and China regarding semiconductor production and technology.
A Ripple Effect on the Semiconductor Industry
Boasting more than 25 years of experience in the semiconductor industry, the accused allegedly founded two chip facilities, one in China and another in Singapore. To staff these operations, over 200 semiconductor professionals were hired, most of them previously employed at Samsung and SK Hynix in South Korea. Prosecutors believe that Samsung’s losses due to the data theft could exceed $233 million.
The severity of the crime goes beyond a mere leak of technology. The attempt to clone an entire semiconductor factory could potentially destabilize the foundation of the domestic semiconductor industry. This industry, already in fierce competition, might face severe repercussions if the allegations hold. The prosecutor’s office underscores the severity, labeling it a “serious crime.”
Further complicating matters, the indictment also extends to six other individuals believed to be accomplices of the ex-Samsung official. As of now, Samsung has chosen to remain silent on the issue. This ongoing situation serves as a stark reminder of the delicate balance between competition, intellectual property rights, and the consequences of disregarding these boundaries.