In South Korea, seven former employees of a Samsung subsidiary have been found guilty of illegally sourcing semiconductor-related technology and passing it on to Chinese companies, as the country steps up its defense of its key secrets.
All countries have long considered semiconductor technologies and the related industry as a whole as one of the elements of ensuring national security. China is years behind Taiwan, the US and South Korea in chip design and manufacturing, and recent tough US restrictions have only exacerbated the problem. It is well known that the second largest economy in the world today spends billions of dollars on the development of industry in China itself. In contrast, in South Korea, where semiconductor products account for about 20% of the country’s total exports, the industry is protected as a “national key technology,” severely restricting technology transfer and employment of skilled workers to other countries.
Monday’s verdict relates to the theft of trade secrets by former employees of Samsung’s SEMES subsidiary, which manufactures devices for the semiconductor and display industries. Little is known about the details of the process. A former researcher working for SEMES was reportedly sentenced to four years in prison for illegally obtaining the company’s semiconductor cleaning technology. He used the information to manufacture similar devices for export to China. The company founded by the researcher was fined $768,000.
Six other former SEMES employees were also found guilty of involvement in the technology theft and sentenced to various terms of imprisonment – up to 2.5 years in prison. The ruling makes it clear that companies with lighter penalties would lose the incentive to invest resources and time in developing technologies.
Former employees are known to have illegally obtained blueprints and data on required components from 2018 to 2020, with some decisions protected by “national key enabling technologies” laws. In addition, the perpetrators violated local fair competition and trade secret laws. Based on the stolen information, they made 24 semiconductor cleaning equipment blueprints and sold 14 cleaning machines for a total value of US$59.8 million. Materials and equipment were sold to Chinese companies and an unnamed Chinese research institute. Seven former SEMES employees are said to have received shares in a Korean-Chinese joint venture based in China.
The problem is not limited to Korea. Not so long ago there was information about “misappropriation” and disclosure of data related to the proprietary technologies of the Dutch ASML. Although the company classified the damage caused as insignificant, the relevant information was forwarded to law enforcement agencies.