Ex-Samsung staff arrested for stealing trade secrets to build copycat chipset plant next door

Ex-Samsung staff arrested for stealing trade secrets to build copycat chipset plant next door

A former Samsung executive was arrested for stealing Samsung chipset trade secrets to build a copycat chipset plant in China.

As reported by Yonhap News Agency, the unnamed 65-year-old former staff faces charges for “violating industrial technology protection and unfair competition prevention” laws. 

Based on the case information released by South Korea’s Suwon District Prosecutors Office, the former Samsung exec stole process layout and design drawings for chip plant basic engineering data (BED), between August 2018 and 2019. Six other people were involved in this heist: one subcontractor of Samsung Electronics, and five Chinese chipmaking employees from the same company by the former Samsung exec.

The severity of stealing the trade secret lies in the technology itself: BED is necessary for manufacturing DRAM and NAND flash chips that are 30 nanometres and below (every nanometre is one-millionth of a millimetre). BED for such precise manufacturing is treated as a “national core technology”, according to the news agency.

The case details said that the former Samsung executive tried to use the stolen technologies to build a copied Samsung plant. It was sited just 1.5 kilometres away from the original chip plant in Xi’an, Western China. Plans for the copied factory failed, with one Taiwanese backer pulling out and withholding its promised KRW 8 trillion (~S$8.424 billion)  investment. 

Instead, the former exec received a significantly “smaller” investment of KRW 460 billion (~S$484.3 million) from Chinese investors to produce trial products in Chengdu, China.

The copied chip plant reportedly had 200 ex-employees of Samsung and SK Hynix Inc., and were instructed to obtain and use stolen semiconductor design data and other trade secrets for manufacturing.

Source: Yonhap News Agency