In recent years, the Chinese government has targeted the semiconductor industry as a strategic priority. Not only has China focused on independent research and development, but it has also employed various strategies to acquire advanced technologies and manufacturing expertise. These methods include offering high salaries to skilled workers, recruiting overseas talent, corporate acquisitions, technological collaborations, and reverse engineering. The overarching aim is to bridge the technological gap with the United States, South Korea, and Taiwan in chip design and manufacturing, ultimately seeking to control the global semiconductor industry.
Chinese semiconductor companies have utilized lucrative incentives to attract experienced engineers from international firms. These incentives range from high salaries and stock options to housing and family relocation support. Some cases involving trade secrets have raised concerns about employees allegedly transporting proprietary technology from their former employers to Chinese entities.
The U.S. Department of Justice and the FBI have repeatedly highlighted instances of trade secret theft linked to China. These include obtaining crucial intellectual property from overseas companies through cyber intrusions, insider infiltration, and illegal transfer of technical documents. Some individuals associated with China’s talent recruitment programs have faced prosecution in the U.S. for leveraging overseas employment opportunities to steal and transfer business secrets.
In the semiconductor sector, major companies such as South Korea’s Samsung, the U.S.’s Micron, and Taiwan’s TSMC have all confronted issues related to technology leakage or personnel poaching.
For instance, on October 22, 2023, a former Samsung Electronics employee was sentenced to five years in prison by the Seoul High Court for leaking Samsung’s 18-nanometer DRAM manufacturing process to a Chinese firm, a reduction from the initial seven-year sentence.
Additionally, investigations revealed that another former department head at Samsung, who transitioned to China’s ChangXin Memory Technologies (CXMT) in 2016, allegedly took seven core technology documents with him, assisting CXMT in recruiting approximately twenty engineers from Samsung and other competing companies.
In 2024, two former Samsung executives were accused of aiding Chengdu Huanxin Technology (CHJS) in establishing a chip replication factory, recruiting numerous South Korean semiconductor experts, and allegedly leaking Samsung’s 20-nanometer DRAM manufacturing technology. Authorities estimate that the involved technologies were worth around $3.2 billion.
In a notable case from 2018, Fujian Jinhua Integrated Circuit, a state-owned enterprise in China, along with Taiwan’s United Microelectronics Corporation (UMC) and associated personnel, were indicted by the U.S. Department of Justice for conspiring to steal Micron’s trade secrets regarding DRAM technology. The DOJ stated that certain individuals had removed a significant quantity of confidential documents from Micron’s Taiwan subsidiary, with one individual downloading over 900 internal files. In 2020, UMC acknowledged its participation in the theft of trade secrets, agreeing to pay a $60 million fine and cooperating with investigations.
In 2025, South Korean prosecutors charged a former SK Hynix employee who allegedly printed and photographed more than 11,000 internal technical documents related to CMOS image sensors and high-bandwidth memory (HBM) during his tenure in China. He was also accused of embedding some of this data in his job application materials for submission to Chinese firms.
Further reports indicated that SK Hynix had an employee who secretly transmitted fifteen core cleaning process documents to ChangXin Memory, employing methods such as concealing USB devices and capturing images of production equipment screens to gather technical data.
An article from CNBC highlighted the evolution of Samsung’s competitive landscape over the past decade. Once primarily challenged by mature rivals such as SK Hynix and Micron, Samsung now faces Chinese memory chip manufacturers that have transformed into formidable competitors.
A former Samsung employee revealed that the company actively monitors the career pathways of certain departing employees to prevent talent drain to competitors. Additionally, non-compete clauses in labor contracts restrict employees from joining competing firms for two years post-employment. For employees possessing vital technical expertise, the scrutiny is even more stringent.
In a decision made in 2023, a South Korean court upheld the two-year non-compete limitation set by Samsung, labeling it not as excessive, but rather essential for safeguarding company technology and business information. This ruling allowed Samsung to block a former DRAM developer from moving to U.S. competitor Micron.
Meanwhile, Chinese semiconductor companies are relentless in their pursuit of overseas talent by offering high salaries, stock options, housing, and family relocation support.
Market research firm Counterpoint Research noted through its senior analyst, Jeongku Choi, that the expertise of these overseas engineers has allowed Chinese chip companies to continue breaking through technical barriers despite U.S. export restrictions. While many once doubted the ability of Chinese chip manufacturers to catch up with global leaders, they have now emerged as significant competitors.
According to Counterpoint’s second-quarter 2026 Memory Tracker report, ChangXin Memory is expected to account for 10% of global DRAM revenue.
Choi further added that traditional chip manufacturers are ramping up legal protections and internal security measures, while also adjusting compensation packages to retain key talent. Furthermore, South Korea has categorized certain semiconductor manufacturing technologies as “national core technologies,” thereby intensifying penalties for unauthorized disclosures.
Choi foresees that as Chinese memory chip companies venture beyond domestic markets and scale exports, the legal disputes surrounding business secrets may escalate, prompting protective measures to evolve from trade secrets to encompass aspects of intellectual property law.
As competition in the semiconductor industry intensifies, companies are increasingly focused on how to protect the technical knowledge accumulated by engineers through complex manufacturing processes. TSMC, the world’s largest chip foundry, is also gradually refining its trade secret protection mechanisms.
Jamie J. Yang, a partner at Taiwan’s Innovatus Law, which specializes in antitrust and intellectual property issues, remarked that Taiwan’s regulations limit post-employment non-compete durations to a maximum of two years. During this period, employers must compensate former employees with at least half of the average monthly salary.
Yang noted the intricate nature of semiconductor manufacturing processes. It is challenging for an individual engineer to acquire adequate technical knowledge to replicate an entire production line in another company.
As the battle for top talent intensifies, the movement of engineers between competing firms may increase. At the same time, semiconductor companies are likely to engage in more legal litigations surrounding trade secrets to safeguard their technological advantages.
However, Zechariah Chan, a partner at Lee & Lee in Singapore, pointed out that in the semiconductor industry, proprietary technology often involves intangible manufacturing processes and operational methods, making trade secret protection particularly challenging.
Chan explained that external entities typically only see the final products, and proving that a competitor utilized proprietary manufacturing techniques is exceptionally difficult. Moreover, the boundary between the specialized skills held by engineers and proprietary company information is often ambiguous. General skills and knowledge belong to the engineer, while trade secrets pertain to the company.
Furthermore, in jurisdictions like Singapore and Hong Kong, courts scrutinize non-compete clauses more rigorously, enforcing them only when it is clear that such restrictions are essential for the protection of legitimate business interests and do not exceed necessary limits.
Legal experts emphasize that trade secrets often reside in employees’ minds, and once leaked to competitors, such disclosures can result in significant harm to former employers. Thus, it is crucial for semiconductor manufacturers to clearly define the specifics of their trade secrets, ensure employees are well-informed about what constitutes confidential information, and implement corresponding security measures to restrict access to relevant information.