Movers And Shakers

Former Samsung Executive Charged with Stealing Company Secrets to Establish Chip Factory in China


South Korean authorities have brought charges against a former Samsung executive, accusing him of stealing valuable company secrets amounting to hundreds of millions of dollars in order to set up a chip manufacturing facility in China.

The development highlights the contentious issue of semiconductors, which has become a focal point in the ongoing rivalry between the United States and China, as they fiercely compete for chip-making technology and supplies.

According to South Korean prosecutors, the 65-year-old former Samsung employee allegedly obtained the company’s factory blueprints and clean-room designs from 2018 and 2019. His attempt to replicate Samsung’s production facility in the Chinese city of Xian, where Samsung already operates a chip factory, was unsuccessful.

The suspect, whose identity remains undisclosed, is currently in detention awaiting trial. The stolen material falls under South Korea’s classification of “national core technology,” which, if disclosed overseas, could potentially harm national security and the economy.

Described as a seasoned expert in semiconductor manufacturing with decades of industry experience, the accused individual has been in custody for some time and was formally charged on Monday, as confirmed by the Suwon district prosecutor’s office.

Prosecutors emphasized the seriousness of the crime, stating that the stolen information could have been valued at least 300 billion won ($236 million) by Samsung. They further expressed concern about the potential negative impact on the country’s economic security and the domestic semiconductor industry, which accounted for 16.5 percent of South Korea’s total exports in 2022 and is considered a national security asset.

In addition to the former executive, six other individuals who collaborated with him have also been charged in connection with the theft. When approached for comment, Samsung declined to provide a statement.

Samsung Electronics, a major global producer of chips and smartphones, and a subsidiary of the Samsung Group, contributes significantly to South Korea’s GDP, accounting for approximately one-fifth of the nation’s total turnover. Similar to other leading chip manufacturers, a significant portion of Samsung’s production is based in China.

Chips serve as the vital foundation of the modern global economy, and China, as the world’s second-largest economy, heavily relies on a steady supply of chips produced by foreign companies for its extensive electronics manufacturing industry. In response to China’s quest for the most advanced chips, the United States implemented a series of export controls last year, aiming to prevent China from acquiring cutting-edge chip technology that could be utilized in advanced weaponry and frontier technologies like artificial intelligence.

The Netherlands and Japan have also introduced their own restrictions this year, without explicitly naming China. These measures have sparked anger in Beijing, which has accused the United States of engaging in “technological terrorism.”

Last month, China claimed that US chip giant Micron had failed a national security review and instructed operators of “critical information infrastructure” to cease purchasing its products, seen by analysts as a retaliatory action against US semiconductor restrictions.
1 year ago
Adeyinka Arutu

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