South Korean prosecutors have detained and charged multiple former employees of LG Display, accusing them of leaking OLED display technology to the Chinese Communist Party (CCP). This comes as the CCP recently seized the global leading position in OLED display technology from South Korea for the first time.
In recent years, due to China’s low-priced exports, South Korea’s various industries have faced the challenge of being closely followed or even surpassed by China, with a shadow of frequent technology theft by the CCP looming behind.
In the display market, following the dominance in low-cost LCD (Liquid Crystal Display), the CCP has now taken the lead in the high-end OLED (Organic Light Emitting Diode) display field, snatching the top position from South Korea. OLED requires higher technical capabilities than LCD, and while South Korean companies originally held global dominance, they were overtaken by Chinese companies.
Market research company Omdia recently revealed that in the first quarter of this year, Chinese display companies accounted for 49.7% of the global OLED market shipment, taking the top spot for the first time. South Korean companies, who had been leading the market, saw their share drop to 49%, shifting them to the second position. In contrast, last year’s first quarter saw South Korea and China’s market shares at 62.3% and 36.6% respectively, with a difference of over 20 percentage points. However, in just one year, a turnaround occurred.
Regardless of OLED or LCD displays, the CCP’s seizure of South Korea’s global leading position was accompanied by rampant technology theft.
Recently, the Seoul Central District Court detained and charged two former employees of LG Display for allegedly violating the Industrial Technology Protection Act and the Act on the Prevention of Unfair Competition and Protection of Trade Secrets. It is reported that the individuals are suspected of taking photos of design drawings at LG Display’s factory in Guangzhou, China between 2021 and 2022 and leaking them to Chinese companies.
One of the individuals, who had been engaged in OLED-related business at LG Display for about 20 years, began the crime after switching jobs to a large Chinese display company in 2021. The person colluded with employees still working at LG Display to steal large-scale OLED production technology.
This case is just the tip of the iceberg in the CCP’s theft of South Korean OLED display technology.
In July of this year, a former Samsung researcher, who allegedly leaked Samsung’s OLED manufacturing-related technology to the CCP, was sentenced to six years in prison by a South Korean court.
The individual disclosed Samsung’s “OLED Display Quasi Molecular Laser Annealing (ELA) Equipment Inverse Optical System” and “OCR Inkjet Equipment” technology. The former maintains the laser intensity and stability towards OLED electronic circuits, while the latter is the equipment that bonds the outermost glass cover plate to the OLED panel and screen. The commercial secret value of these two technologies is at least 340 billion Korean won (approximately $250 million).
According to the South Korean prosecutors, the individual was an OLED display domain expert who had worked at Samsung’s display plant for over 10 years. After retiring, he established and operated a display company in South Korea, attempting to sell and provide related technology to a company he had set up in China. In the process, he imitated Samsung’s technology, persuaded his junior researchers from his time at Samsung, and leaked the trade secrets.
Furthermore, in July 2023, the Seoul High Court sentenced the former representative of TOPTEC, who sold Samsung’s OLED folding technology to four Chinese companies including BOE, to three years in prison. He was sentenced along with eight former TOPTEC employees.
The OLED folding technology invested by Samsung over 150 billion Korean won (about $120 million), involved 38 engineers, and took six years of research efforts.
BOE is one of the Chinese companies that received massive support from the CCP and succeeded in stealing Korean technology, including that of Samsung. By extensively monetizing Korean technology and engaging in low-price strategies under the subsidy of the CCP, BOE has emerged as the largest display company in China.
BOE’s entry into the market occurred by stealing Korean LCD technology.
BOE entered the LCD market by acquiring South Korea’s Hyundai Display Technology Co., Ltd. in 2002. However, in 2006, BOE suddenly bankrupted and withdrew Hyundai from Korea. At the time, the South Korean display industry suspected that BOE had acquired Hyundai to steal LCD technology to China. Later investigations by South Korean prosecutors confirmed this suspicion.
In 2008, the investigation results showed that in 2004, BOE signed an LCD technology licensing contract with Hyundai, using it as a facade to merge the two companies’ electronic networks. During this process, Hyundai leaked 4,331 pieces of technical data to China, including over 200 TFT-LCD core technology information.
With the CCP satisfying their appetite for stealing Korean technology, the theft of Korean technology has become rampant, with cases where Chinese companies directly infiltrated South Korea to steal technology unfolding.
In January, South Korean police handed over to prosecutors D and five former/current employees of Samsung SDI and SK On (formerly Innovation), along with Honeycomb Energy (Korea), Honeycomb Energy China, and parent company Great Wall Motor for suspected violations of the Industrial Technology Protection Act.
According to South Korean authorities, after the establishment of Chinese battery company SVolt Energy Technology in Korea, they set up a research institute and office at Korea University’s Industry-university support facility in 2020, allegedly stealing national core technology from Korean battery companies Samsung SDI and SK On. SVolt Energy’s parent company, China’s largest SUV manufacturer, Great Wall Motor, reportedly organized the directive to plunder the technology.
Following the establishment of SVolt Energy (Korea), individuals like D closely approached key researchers from major Korean companies holding core technology in the battery industry by offering generous economic incentives to persuade them to join the company.
Individuals like D allegedly took photos of electric car drawings and battery assembly drawings with their smartphones while working at the company in 2018 and provided them to Chinese entities after joining SVolt Energy (Korea). D had served as a senior executive at Samsung SDI for over a decade, responsible for the R&D of core battery assembly technology.
The latest case of CCP stealing large-scale technology in the chip sector has also been disclosed.
At the end of 2023, South Korean prosecutors detained a former senior official from Samsung Electronics, Kim, for allegedly leaking South Korea’s national core technology, the 18-nanometer DRAM semiconductor engineering information, to China’s largest DRAM manufacturer, CXMT. Kim had moved to CXMT in 2016, earning over 1 billion Korean won (approximately $750,000) annually during a span of around seven years.
Authorities speculate that Samsung Electronics and its collaborating companies suffered losses amounting to 23 trillion Korean won (about $17 billion) as a result.
According to investigations by the South Korean Police Department, in the first half of this year, a majority of Korea’s core technologies in semiconductors, batteries, and other fields were leaked to China. Statistics indicate that there were 12 incidents of advanced technological leakage abroad in the first half of this year from Korea, with 10 incidents flowing to China, accounting for 83%.
According to data from the South Korean Police Department, the percentage of Korean technology leaked overseas increased annually over the past 10 years from 2013 to October 2023. Out of these incidents, 67% of the leaked technologies ended up in China.
In addition to the display sector, South Korea’s global dominance in core industries like batteries and shipbuilding has also been taken over by China for many years, relegating Korea to second place. In the first quarter of this year, Chinese companies held approximately 48% of the global electric vehicle battery market share, while Korean battery companies only held about 25%. A report from the Korea Industrial Research Institute this year indicated that in 2023, China surpassed Korea and ranked first in the comprehensive competitiveness of the shipbuilding industry value chain.