Former Samsung executive arrested for 'stealing confidential data to build chip factory in China'

The 65-year-old former senior Samsung executive has been charged with violating the Industrial Technology Protection Act and the Unfair Competition Act, Yonhap news agency reported on June 12, citing a statement from the South Korean prosecutor's office. The person's identity was not made public.

Samsung factory in Pyeongtaek, South Korea

Prosecutors also did not name the company, calling it "Company A" and describing it as " the world's No. 1 market share holder in semiconductors and memory." Samsung is the world's leading memory chip maker and the company described by prosecutors, according to CNN.

Prosecutors allege he stole confidential Samsung data, including basic engineering data, chip factory designs and layouts, to build a semiconductor plant similar to the company’s in Xi’an, China, from August 2018 to 2019.

Six others were also charged with complicity but were not detained.

Prosecutors said the former executive used stolen technology and data to build a replica factory just 1.5 kilometers (0.9 miles) from Samsung’s chip plant in Xi’an. But the plan fell through when an unnamed Taiwanese company reneged on a promise to invest 8 trillion won ($6.2 billion) in the project.

The former Samsung executive is said to have received 460 billion won in investment from Chinese investors and produced test products using Samsung technology at a chip factory in Chengdu, China last year.

Despite the fact that the factory project was not completed, he hired about 200 employees from Samsung and SK Hynix, South Korea's second-largest chipmaker. He is accused of directing employees to obtain and use Samsung's semiconductor design data and other trade secrets. He is known as the "best expert" in South Korea's chipmaking industry and worked for "Company A," Samsung, for 18 years and as vice president of "Company B," SK Hynix, for about 10 years.

Prosecutors estimate the technology leak cost Samsung at least 300 billion won. Samsung has not commented on the indictment.

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