A former executive for Samsung Electronics in South Korea was indicted Monday for allegedly handing over company secrets to China for a copy-cat chip maker.
The unidentified suspect worked in the powerful South Korean chipmaking industry for nearly 30 years, both at Samsung and SK Hynix, prosecutors said, according to Reuters. The former exec is accused of illegally acquiring Samsung data with the aim of helping build a rival chip factory in Xian, China, a mile away from a Samsung facility.
NEW: A former Samsung executive allegedly stole blueprints and designs to replicate an entire semiconductor plant in China, Korean prosecutors sayhttps://t.co/L5nciPsD0n
— Bloomberg (@business) June 12, 2023
Samsung is believed to have taken at least $233 million worth of losses as a result of the alleged theft. The defendant has denied any wrongdoing, and the bid to build the factory in 2018 and 2019 was reportedly unsuccessful due to a lack of adequate funding.
“It’s a grave crime that could deal a heavy blow to our economic security by shaking the foundation of the domestic chip industry at a time of intensifying competition in chip manufacturing,” the Suwon District Prosecutor’s Office said, according to Reuters.
Chip development and manufacturing has become a critical battleground between China on one side and South Korea, Taiwan and the United States on the other. President Joe Biden signed the CHIPS Act into law with the aim of improving American competitiveness in the industry versus China’s rising sector. (RELATED: Republican Sen. Tommy Tuberville Bought Thousands In Chips Stock Days Before Biden Signed Massive Chip Bill)
Despite being a close partner with the United States in trying to curtail the power of China overall, South Korea sends about 40% of its chip exports to China, according to trade ministry data cited by Reuters. Samsung and SK Hynix have both invested billions of dollars in chip manufacturing facilities in China in recent years.
Meanwhile, South Korean authorities have taken increasing steps to fight back against corporate espionage as of late. Police said Sunday they had arrested 77 people in connection with industrial espionage in a nationwide crackdown over the last four months, according to Reuters.