Seoul High Court recently announced the verdict of a former employee of SK Hynix, sentencing him to 1 year and 6 months in prison for allegedly leaking commercial secrets to a Chinese company, maintaining the ruling of the first instance.
The employee, who previously worked at SK Hynix’s China branch, was accused of violating company confidentiality rules by printing, photographing internal data, and leaking some commercial secrets related to CMOS image sensor (CIS) technology to a Chinese company.
SK Hynix, headquartered in Icheon, South Korea, is one of the world’s top semiconductor manufacturers, second only to Samsung Electronics, and ranks as the world’s second-largest memory chip maker.
According to reports from the South Korean legal community cited by Yonhap News Agency, Seoul High Court’s Criminal Division 10-1 recently upheld the sentence of SK Hynix’s former employee, Mr. Kim, who was charged with violating the Industrial Technology Protection Act, Prevention of Unfair Competition and Protection of Trade Secrets, and breach of trust, sentencing him to 1 year and 6 months imprisonment.
Kim was accused of disclosing cutting-edge technology and commercial secrets of the company’s image sensor (CIS) during his tenure at SK Hynix’s China branch in 2022, and using them on his job applications.
It was discovered that before committing the act, Kim had received a job offer from Hisilicon Technologies Co., Ltd, a subsidiary of Huawei.
The appellate court, Seoul High Court, stated that the commercial secrets leaked by the defendant were the result of the company’s years of investment in resources. A lenient punishment for Kim would weaken the company’s technological research and development capabilities, allowing overseas competing companies to easily take away South Korean companies’ hard-earned technology under the guise of talent introduction. However, since Kim admitted all suspicions and most of the leaked commercial secrets had been retrieved, these were considered as favorable mitigating circumstances.
Additionally, Korean media outlet “Asia Business Daily” reported that Kim was also accused of leaking “hybrid bonding” data of next-generation memory technology High-Bandwidth Memory (HBM) but the first instance court acquitted him of this charge, which was upheld in the second trial.
SK Hynix is considering selling its equity stake in the Chongqing semiconductor packaging factory. Industry analysts believe that this move aims to restructure global production facilities to gain a dominant position in the competition for AI semiconductors.
According to reports from foreign media such as Bloomberg on the 9th, SK Hynix is in discussions with consultancy firms regarding the disposal of the Chongqing factory’s equity. The equity is valued at around $3 billion (42 trillion Korean won).
Potential buyers include Chinese investment funds and local semiconductor companies. Apart from the option of transferring all shares, options to sell a partial stake are also being considered.
Since its establishment in 2014, SK Hynix has always held full ownership of the Chongqing factory. The factory is responsible for packaging operations, equipped with large production lines, capable of producing approximately 40% of SK Hynix’s total flash memory packaging output. Along with the factories in Wuxi (DRAM) and Dalian (NAND), it is one of SK Hynix’s three major manufacturing bases in China.
Industry experts believe that SK Hynix’s adjustment this time is aimed at concentrating production facilities in South Korea and the United States to enhance operational efficiency. SK Hynix has been facing challenges in importing advanced packaging equipment to China due to US export restrictions.
Currently, SK Hynix is advancing projects worth 60 trillion won in the Icheon semiconductor cluster and 10 trillion won in the Cheongju complex.