Employees of Samsung Electronics Co. check equipment of the clean room of its semiconductor production facility. (image: Samsung Electronics)
SEOUL, Sept. 28 (Korea Bizwire) – South Korean prosecutors have indicted two former semiconductor industry executives on charges of stealing cutting-edge memory chip technology from Samsung Electronics and using it to establish a rival company in China.
The Seoul Central District Prosecutors’ Office announced on September 27 that it had formally charged the two men, identified only by their surnames Choi and Oh, with violating laws protecting industrial technology and preventing unfair competition. Both suspects have been arrested and will remain in custody during their trial.
Prosecutors allege that Choi, 66, and Oh, 60, established a company called Chengdu Gaozhen (CHJS) in late 2019 with an investment of approximately 400 billion won from a local Chinese government. The pair then allegedly misappropriated Samsung’s proprietary technology for producing 20-nanometer DRAM chips, which is classified as a core national technology in South Korea.
Choi, who held senior positions at both Samsung Electronics and SK Hynix (formerly Hynix Semiconductor) during his 30-year career in the Korean semiconductor industry, served as the CEO of the Chinese firm. Oh, who previously worked as a senior researcher in Samsung’s DRAM memory division, took on the role of head of development at CHJS.
According to the prosecution, the defendants managed to develop DRAM manufacturing processes in just 18 months, becoming the second company in China to successfully produce DRAM test wafers. This achievement raised suspicions, as semiconductor companies typically require four to five years to develop such advanced processes.
The technology in question was developed by Samsung at a cost of 4 trillion won. Prosecutors estimate that if CHJS had succeeded in mass-producing chips using this technology, it could have caused tens of trillions of won in damages to Samsung Electronics.
Further investigation revealed that Choi acquired shares in CHJS worth 86 billion won and received 1.8 billion won in compensation. The company itself has also been indicted for its alleged role in orchestrating the technology theft.
“Considering the gravity of the case, we worked closely with the police from the early stages of the investigation to secure the arrests of the defendants,” a representative from the prosecutor’s office stated. “We will continue to respond firmly to technology leakage crimes that threaten victim companies and the national economy.”
Kevin Lee (kevinlee@koreabizwire.com)
