Former Samsung Executive Accused of Stealing Plans for Chinese Chipmaking Plant and Attempting to Replicate It Nearby

A former Samsung executive has been charged with stealing blueprints and trade secrets from the technology giant and attempting to set up his own rival microchip factory in China. The 65-year old man, who has not been named, was accused of using the secrets to launch the competing operation less than a mile from Samsung’s chip plant in Xi’an, central China. The man allegedly planned to create an entire copycat factory and manufacture semiconductors using Samsung’s processes. Prosecutors charged six people employed by the man’s China-based company with participating in the alleged tech theft.
 
Samsung is based in Korea, where the chip industry is a significant part of the economy. The technology prosecutors said was stolen would have been worth at least $233m for Samsung. South Korea is highly sensitive to breaches of technologies related to semiconductors, which accounted for almost 17% of its total exports in 2022. 
 
The suspect was an undisputed top domestic expert in semiconductor manufacturing, according to a statement by prosecutors. He worked for 18 years at Samsung before holding executive roles at SK Hynix, another major South Korean chipmaker that trails Samsung in the memory chip market. He went on to create chip-manufacturing companies in China and Singapore with the backing of Chinese and Taiwanese investors, attracting 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 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. Plans to establish the copycat factory had begun to make progress before prosecutors intervened, and the former executive was reportedly able to receive $357m from Chinese investors to make trial products based on existing Samsung technology after a Taiwanese company balked on a promise to invest $6.2bn in the operation. Samsung did not immediately respond to a request for comment on the charges. 
 
Semiconductors, which account for memory storage and processing across personal computing and help power AI technology, are a valuable technological resource. The prosecutors’ office described the man’s crime as incomparable in damage and scale to previous theft cases.