In a recent development, South Korean prosecutors have taken legal action against a former executive of Samsung Electronics, accusing him of stealing the company’s technology to establish a chip factory in China. The individual, who previously held a vice president position at SK Hynix as well, allegedly obtained Samsung data illicitly with the intention of constructing a factory in the city of Xian, China, between 2018 and 2019, according to a statement from the Suwon District Prosecutors’ Office. The trial date is yet to be determined by the local court where the indictment has been filed.
The defendant, who was apprehended last month, vehemently denies the allegations, as stated by a prosecutor involved in the case. He boasts an extensive career of 28 years in the South Korean chipmaking industry, having worked for both Samsung and SK Hynix, although his identity has not been disclosed by officials.
At present, Reuters has been unable to contact the accused for comment. Prosecutors claim that the former Samsung executive sought to establish the factory approximately 1.5 kilometers (1 mile) away from Samsung’s existing chip manufacturing facility in Xian, after establishing a semiconductor company. However, the endeavor to utilize Samsung’s data for this purpose failed due to funding issues, according to one of the prosecutors.
In addition to the main defendant, six other individuals have been indicted for their alleged involvement in the crime, including an employee of an inspection company who stands accused of leaking the architectural plan of Samsung’s semiconductor factory. Prosecutors estimate that the theft of data has caused losses to Samsung Electronics valued at a minimum of 300 billion won ($233 million).
The prosecutors’ office described the incident as a serious offense that could severely impact economic security by undermining the foundation of the domestic chip industry, especially considering the intensifying competition in chip manufacturing. Samsung Electronics and SK Hynix have declined to comment on the matter.
This indictment comes at a time when South Korea has pledged to provide increased support for its chip sector. President Yoon Suk Yeol has emphasized the industry’s intense competition, labeling it an “all-out war,” particularly given the heightened tensions between China and the United States. Notably, both Samsung and SK Hynix, the top two global manufacturers of memory chips, have made significant investments in chip factories located in China.
