Former Samsung executive charged with stealing chip technology for Chinese factory

Prosecutors in South Korea have charged a former Samsung executive for allegedly stealing valuable company secrets worth hundreds of millions of dollars with the intention of establishing a replica chip factory in China. This development comes amidst the escalating battle between the United States and China over access to chip-making technology and supplies, with semiconductors becoming a contentious issue.

The accused, a 65-year-old former employee of Samsung whose identity has not been disclosed, is said to have stolen the company’s factory blueprints and clean-room designs from 2018 and 2019. He attempted to set up a copycat production facility in Xian, China, where Samsung already operates a chip factory, but his efforts were unsuccessful. The stolen material falls under South Korea’s classification of “national core technology,” a category that, if disclosed abroad, could potentially harm national security and the economy.

Described as a seasoned expert in semiconductor manufacturing with several decades of industry experience, the accused has been in custody for a considerable period and was formally charged on Monday. South Korean prosecutors emphasized the seriousness of the crime, highlighting its potential to severely impact economic security and destabilize the domestic semiconductor industry, which accounted for 16.5 percent of the country’s total exports in 2022.

The stolen information is estimated to have a value of at least 300 billion won ($236 million) to Samsung. In addition to the former executive, six other individuals who collaborated with him have been charged in connection with the theft. Samsung declined to comment on the matter.

Samsung Electronics, a major producer of chips and smartphones globally, generates a substantial portion of its production from facilities in China. The global economy relies heavily on chips, and China, as the world’s second-largest economy, depends on a steady supply of chips manufactured by foreign companies for its thriving electronics industry.

To prevent China from obtaining advanced chips that could be used in cutting-edge weaponry and frontier technologies like artificial intelligence, the United States imposed a series of export controls last year. The Netherlands and Japan followed suit this year, implementing their own restrictions without explicitly naming China. These limitations have triggered strong reactions from Beijing, which has accused the United States of engaging in “technological terrorism.”

Last month, China announced that American chip giant Micron had failed a national security review and instructed operators of “critical information infrastructure” to cease purchasing its products. Analysts view this move as retaliation against the semiconductor restrictions imposed by the United States.