Former executives of Samsung were detained for allegedly stealing $3.2 billion in technology to establish a chip manufacturing facility in China.
TakeAway Points:
- Two former executives of Samsung were detained after stealing $3.2 billion in semiconductor technology to establish a Chinese replica plant.
- The 20-nanometer DRAM chip technology leak, which hurt Samsung and South Korea’s competitiveness internationally, was the result of the espionage.
- The Chinese project was put on hold as police looked into potential leaks and the involvement of other staff members.
- Meanwhile, in that earlier case, a former Samsung executive was accused of stealing blueprints to replicate an entire fabrication plant in China
Former Samsung officials get arrested
South Korean police have arrested two former Samsung Electronics Co. officials on suspicion of stealing semiconductor technologies valued at over 4.3 trillion won ($3.2 billion). The Seoul Metropolitan Police Agency announced on Tuesday that the two individuals, identified as Choi, 66, and Oh, 60, were involved in a scheme to build a copycat chipmaking plant in China. Choi, who previously held executive positions at Samsung Electronics and Hynix Semiconductor (now SK Hynix), allegedly recruited South Korean chip experts and leaked Samsung’s memory technologies through a joint venture with local Chinese officials.
The police did not provide specific timeframes or the exact location in China where the plant was being constructed. However, the details of this case bear similarities to an incident that surfaced in 2023, amid rising tensions between Beijing and Washington over sanctions targeting China’s chip sector. In that earlier case, a former Samsung executive was accused of stealing blueprints to replicate an entire fabrication plant in China.
Specifics of the Surveillance
The Seoul Metropolitan Police Agency described the incident as a severe security violation. Choi served as the chief of the joint venture, Chengdu Gaozhen (CHJS), and was assisted by Oh, who was the head of process design. The pair collaborated with Chinese officials to produce 20-nanometer DRAM chips last year, which the police said not only damaged Samsung but also weakened South Korea’s competitiveness in the global chip war.
Choi established Chengdu Gaozhen in September 2020 in collaboration with a local Chinese government. He recruited domestic semiconductor experts, including Oh, a former senior researcher at Samsung Electronics, to leak and illegally use Samsung’s core memory semiconductor technology. By April 2022, Choi had produced basic development products to measure their functionality as actual semiconductors.
Economic impact and additional investigations
The economic value of the leaked 20-nanometer process development technologies from Samsung Electronics is estimated at 4.3 trillion won (approximately $3.3 billion). The police have successfully halted the Chinese venture’s operation but are still investigating further technology leaks. They are also looking into other employees who moved from domestic companies, including Samsung Electronics, to Chengdu Gaozhen, to determine if there were additional technology leaks.
A police official stated, “This case has shaken the foundation of economic security by attempting to produce semiconductors with domestic technology through direct collaboration between a former executive of a domestic semiconductor company and a local Chinese government, leading to a potential weakening of national competitiveness.”
