Two former Samsung execs have been arrested in South Korea on allegations of stealing over $3.2 billion worth of intellectual property to establish a chip factory in China.
Samsung execs arrested in South Korea on allegations of stealing intellectual property
According to South Korean media, the Seoul Metropolitan Police apprehended the two individuals, identified only by their surnames. Chinese officials reportedly collaborated with the accused to launch a joint venture in China called “Chengdu Gaozhen,” with one of the arrested individuals leading the project.
According to a report from Bloomberg, 66-year-old Mr. Choi set up the joint venture in China. This was alongside some local officials and served as its CEO. A plant designer, Mr. Oh, reportedly assisted him in this venture.
The former Samsung executive reportedly recruited several Korean semiconductor experts. It includes the second suspect, a former senior researcher at Samsung Electronics. They allegedly stole Samsung’s 20-nanometer chip technology and other proprietary information to replicate it in China.
The senior researcher, who became the head of process design at Chengdu Gaozhen, played a key role in the technology theft. Police estimate the economic value of the stolen technology to be around 4.3 trillion won ($3.2 billion). Investigators are looking into other employees who may have also been involved.
The police said Choi’s move “weakened the nation’s competitiveness when the countries are in a global chip war.” With the arrest of the company’s head, the authorities claimed that this would stop the operation of the Chinese venture.
It’s not the first time
Authorities have not clarified whether these arrests connect to a similar case from last year when prosecutors charged a former Samsung executive with using stolen information to build a chip factory in China. Both that individual and one of the recently arrested suspects share the same surname. It suggests either new developments in the same case or a separate incident entirely.
This is not an isolated incident, as industrial espionage, particularly in the chip industry, has been on the rise. Last year, a suspected Chinese spy stole ASML’s chipmaking secrets, and U.S. authorities accused a telecom worker of conducting espionage for China over a decade.
In South Korea, chip IP theft has also been a concern, with the involvement of both North Korean and Chinese actors. Back in May this year, police also arrested a former SK Hynix employee at a South Korean airport for printing 3,000 pages of semiconductor process data. The authority suspected that she was working with Huawei and carrying these printed documents for the company. However, she denied all the allegations.
2024-09-11 15:05:37