Ex-Samsung Executive Accused Of Plans To Build Similar Chip Factory In China

(RTTNews) - South Korean prosecutors have filed charges against a former Samsung executive for allegedly collaborating with competitors in an attempt to construct a copycat semiconductor factory in China. In a statement released on Monday, the Suwon district prosecutor's office announced the indictment of a 65-year-old former employee of "Company A" on charges of data theft.

While the company was not explicitly named, officials referred to it as "the world's number one market share holder in the memory and semiconductors field." According to a source familiar with the matter, Samsung, the global leader in memory chip manufacturing, is the company in question. Samsung declined to comment on the indictment.

The defendant, whose identity remains undisclosed, stands accused of wrongfully utilizing engineering data from the company's semiconductor factory, including floor plans, core production processes, and design drawings, with the intention of building a duplicate plant in Xi'an, China, located approximately 1.5 kilometers away from a Samsung semiconductor facility.

The prosecutor's office stated, "Using expertise and authority gained while working for a major local company in the semiconductor manufacturing field, the accused colluded with significant capital investors in China and Taiwan to establish a semiconductor manufacturing company in China and Singapore."

The defendant, considered a highly regarded expert in South Korea's chipmaking industry, worked at "Company A" for around 18 years before serving as vice president at "Company B" for a decade. The second company has been identified as SK Hynix, another major South Korean chip manufacturer. SK Hynix has yet to respond to requests for comment.

Prosecutors allege that the defendant even recruited over 200 skilled tech workers from both companies in South Korea, enticing them with lucrative salaries. The accused now faces charges of violating fair competition rules and the Industrial Technology Protection Act, a law designed to safeguard the country's technological prowess and national security. Six alleged accomplices have also been prosecuted.

In recent months, several nations, including the United States, the Netherlands, and Japan, have imposed restrictions on the sale of chipmaking equipment to China as part of a coordinated international effort led by Washington. These measures have been strongly opposed by Beijing.

Prosecutors argue that if the defendant had successfully executed the plan to build the plant and mass-produce chips of similar quality to their former employer, it would have caused irreparable damage to South Korea's semiconductor industry. Reuters reported that the attempted replication using Samsung data between 2018 and 2019 ultimately failed due to funding issues.