South Korean police have arrested two former executives of Samsung Electronics on charges of stealing commercial secrets and technology worth over 4.3 trillion South Korean won (approximately 3.2 billion US dollars) to build a knockoff Samsung chip manufacturing plant in China.
According to the Seoul Metropolitan Police Agency (SMPA), the two individuals arrested were identified as Choi, a 66-year-old South Korean who was in charge of the Chinese company Chengdu Gaozhen Technology Co., Ltd., and Wu, a 60-year-old South Korean who served as the company’s chief designer. Choi previously held senior positions at Samsung Electronics and SK Hynix Inc., while Wu was a former senior researcher at Samsung.
Choi reportedly established a joint semiconductor company with a local Chinese government in September 2020 and recruited a large number of Korean chip experts, including Wu, to leak Samsung’s core memory technology through the joint venture. Wu is accused of playing a key role in the suspected technology theft after transitioning to Chengdu Gaozhen Technology Co., Ltd.
Authorities stated that the two individuals collaborated with Chinese officials last year to produce 20-nanometer Dynamic Random-Access Memory (DRAM) chips and planned to manufacture the basic product by April 2022. They believe that this not only harmed Samsung’s interests but also “weakened national competitiveness” during the global chip war among countries.
The economic value of the leaked Samsung technology is estimated by police to be 4.3 trillion South Korean won (3.2 billion US dollars). They claim that their investigation successfully halted the operations of the Chinese company. Currently, authorities are looking into whether other former Samsung employees who relocated to Chengdu and are still working at Chengdu Gaozhen Technology Co., Ltd. were involved in further technology leaks.
South Korea, as a crucial ally in curbing China’s technological ambitions, is one of the world’s most significant producers of memory chips.