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Former Samsung executive charged for leaking secrets in China

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Samsung Electronics' chip factory in Xian, China. [SAMSUNG ELECTRONICS]
Samsung Electronics’ chip factory in Xian, China. [SAMSUNG ELECTRONICS]

A former Samsung Electronics executive has been charged for allegedly leaking at least 300-billion-won ($232.7 million) worth of trade secrets to build a copycat chip factory in China.

The 65-year-old former executive allegedly tried to build a chip factory in China, just 1.5 kilometers (0.9 miles) away from Samsung Electronics’ manufacturing plant in Xi’an, using illegally obtained data, according to Suwon District Prosecutions Office on Monday.

Suwon, Gyeonggi is where the Korean chipmaker is headquartered.

The suspect is charged with breaching Korea’s protection of industrial technology and unfair competition prevention regulations.

The suspect is accused of leaking Samsung Electronics’ confidential information, including the chip factory’s basic engineering data (BED) and the plant layout.

Six other people, including an ex-employee at one of Samsung Electronics’ subcontractors, have also been charged for their alleged involvement.

BED at a chip factory indicates to technology that contaminants such as dust are not inside the room where chips are being manufactured.

The prosecution office also said the stolen information includes the arrangement of the chip’s eight major processing steps and their layout sizes which play a crucial role in determining the quality of semiconductors.

The suspect, according to prosecutors, worked at Samsung Electronics for 18 years, followed by another 10 years as a senior executive at its domestic rival SK hynix.

He attempted to build the copycat chip factory next to Samsung in Xi’an, with a 460-billion-won investment from the city of Chengdu and another 8 trillion won promised from a Taiwanese electronics company between 2018 and 2019.

The plan was never materialized, however, as the Taiwanese company did not keep its investment promise.

The suspect had scouted some 200 semiconductor experts from Samsung Electronics and SK hynix, among others, to carry out the plan.

“[The leaked data] are trade secrets worth at least 300 billion won and a maximum of trillions of won,” said the prosecution office in a release Monday, adding such data is what Samsung Electronics has worked on for the past 30 years.

“Basic engineering design and manufacturing process layout is technology related to manufacturing sub-30-nano DRAM and NAND flash memory chips which are part of the national core technology.”

There has been a slew of cases recently where confidential information on Samsung Electronics’ chip business has been leaked to China as the country tries to stay competitive in the sector amid strict sanctions from the United States.

Early this year, a former researcher at Semes, a subsidiary of Samsung Electronics that makes semiconductor cleaning equipment, was sentenced to four years in prison for leaking crucial information on the equipment to rival Chinese companies and a local chip research center.

BY EUN-SOO JIN [jin.eunsoo@joongang.co.kr]

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