South Korea Indicts Ex-Samsung Elec Executive for Alleged Data Leak to China

Reuters

15:39 JST, June 12, 2023

SEOUL (Reuters) – South Korean prosecutors said they indicted a former Samsung Electronics 005930.KS executive on Monday on suspicions of stealing the company’s technology to build a chip factory in China.

The defendant, who also formerly worked at SK Hynix 000660.KS as a vice president, is accused of illegally acquiring Samsung data to build a factory in the northwestern Chinese city of Xian between 2018 and 2019, the Suwon District Prosecutors’ Office said in a statement.

The trial date was yet to be confirmed by the local court where the indictment has been filed.

The defendant, arrested last month, worked a combined 28 years at the South Korean chipmakers, prosecutors said. The officials did not identify the accused.

Reuters was not immediately able to reach the defendant for comment.

The former Samsung executive allegedly tried to build the factory 1.5 km (1 mile) away from Samsung’s chip manufacturing facility in Xian after setting up a semiconductor company, prosecutors said.

The attempt to build the new plant using Samsung data, however, ended in failure due to funding issues, South Korea’s Yonhap news agency said.

Prosecutors said they have also indicted six other people for their involvement in the alleged crime, including an inspection company employee who is accused of leaking the architectural plan of Samsung’s semiconductor factory.

Prosecutors said they estimated the theft of the data to have inflicted at least 30 billion won ($23 million) worth of losses to Samsung Electronics.

“It’s a grave crime that could deal a heavy blow to our economic security by shaking the foundation of the domestic chip industry at a time of intensifying competition in chip manufacturing,” the prosecutors’ office said.

Samsung Electronics did not immediately respond to a request for comment. SK Hynix declined comment.

The indictment comes as South Korea has vowed to step up support for its chip sector, with President Yoon Suk Yeol describing competition in the industry as an “all-out war” amid heightened Sino-U.S. tension.

South Korea’s Samsung and SK Hynix, the world’s top two makers of memory chips, have invested billions of dollars in chip factories in China.

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