- An ex-Samsung executive has been indicted on charges of stealing company secrets for a chip plant.
- The 65-year-old man tried to use the stolen plans to build a copycat facility, prosecutors said.
A former Samsung executive stole blueprints and trade secrets from his ex-employer — and then tried to set up a microchip factory in China less than a mile away from Samsung's own, prosecutors said.
The 65-year old man, whose identity wasn't disclosed, was charged by South Korean authorities with using secrets to attempt to set up the rival operation less than a mile from Samsung's chip plant in Xi'an, a city in central China. Samsung is based in Korea, where the chip industry is considered key to its economic competitiveness.
The technology prosecutors said was stolen by the man's China-based company would have been worth at least $233 million for Samsung. They charged six people employed by the man with "active participation" in the alleged tech theft.
Plans to establish a copycat factory — in what would be less than a 20-minute walk from one of Samsung's three chip-manufacturing plants in China — had begun to make progress before prosecutors intervened.
After a Taiwanese company balked on a promise to invest $6.2 billion in the operation, the former executive was reportedly able to receive around $357 million from Chinese investors to make trial products based on existing Samsung technology, South Korean news agency Yonhap reported.
South Korea is highly sensitive to breaches of technologies related to semiconductors, which accounted for nearly 17% of its total exports in 2022. Samsung, the world's largest manufacturer of computer memory chips, didn't immediately respond to Insider's request for comment on the charges. It also didn't comment to the AP.
The Suwon District Prosecutors' Office said Monday that it was taking "stern legal measures" against the former executive, according to a Korean Herald report on a press conference.
In a statement, prosecutors described the arrested man as an "undisputed top domestic expert in semiconductor manufacturing." After an 18-year career at Samsung, he held executive roles for a decade at SK Hynix, another major South Korean chipmaker, which trails Samsung in the memory chip market, according to prosecutors.
The man later created chip-manufacturing companies in China and Singapore with the backing of Chinese and Taiwanese investors and lured more than 200 chip experts from Samsung and Hynix with higher pay before arranging to smuggle out crucial technologies from Samsung, prosecutors said.
The manufacturing secrets that prosecutors said were taken from Samsung included processing blueprints and "basic engineering data" for designing clean-room environments to prevent contamination during semiconductor manufacturing, which prosecutors described as "core national technologies."
"The suspect … attempted to duplicate an entire (Samsung) factory to manufacture and mass-produce semiconductors in China," said the prosecutors' office, which described his crime as incomparable in damage and scale to previous theft cases.
Used across personal computing for memory storage and processing, the chips created by semiconductor plants also help power AI technology.