Ex-Samsung executive indicted for stealing trade secrets to build chip plant in China

Seoul, June 12

A former senior executive of Samsung Electronics has been arrested and indicted for stealing the chip giant's trade secrets to build a copycat chip plant in China, prosecutors said on Monday.

The 65-year-old former executive, whose name is withheld, was charged with violating the industrial technology protection and unfair competition prevention laws, according to the Suwon District Prosecutors Office.

He is accused of attempting to build a complete copy of Samsung's semiconductor factory in China after illegally acquiring the company's confidential data, including chip plant basic engineering data (BED) and process layout and design drawings, from August 2018 to 2019, reports Yonhap news agency.

The prosecution also indicted six other people -- one employee of a Samsung Electronics subcontractor and five employees of a Chinese chipmaker established by the former executive -- without detention on charges of colluding in the alleged technology leak.

BED is a technology needed to ensure impurities do not exist in semiconductor manufacturing facilities. Process layout contains information on the floor plan and dimension of a chip plant's eight core processes for semiconductor production. Such trade secrets essential for the manufacturing of sub-30-nano DRAM and NAND flash chips are considered national core technologies.

According to prosecutors, the former executive had attempted to use the stolen technologies and data to build a copy of Samsung Electronics chip plant just 1.5 kms away from the company's chip plant in Xian, western China. But his plan failed to materialize as a Taiwanese company broke its promise to invest 8 trillion won ($6.2 billion) in the project, they said.

Instead, the former executive reportedly received an investment worth 460 billion won from Chinese investors and produced trial products from a chip manufacturing plant built on the basis of Samsung technology in Chengdu last year.

His Chinese chip plant is known to have hired about 200 people from Samsung and SK hynix Inc. He allegedly instructed his employees to obtain and use Samsung's semiconductor design data and other trade secrets and they participated in the crime according to his instructions, prosecutors said, estimating Samsung suffered damage of at least 300 billion won due to the technology leaks.