Chip Espionage Case Raises Alarm Over Korea’s Strategic Industries (Yonhap)
SEOUL, Dec. 23 (Korea Bizwire) — South Korean prosecutors have charged a group of former Samsung Electronics employees with illegally transferring core semiconductor technologies to a Chinese rival, in what authorities described as one of the most serious cases of industrial espionage involving the country’s strategic industries.
The Seoul Central District Prosecutors’ Office said on Tuesday that five former employees of Samsung Electronics were indicted on charges including overseas leakage of trade secrets and disclosure of national core technologies, violations that carry heavy criminal penalties. Five employees of China’s ChangXin Memory Technologies, or ChangXin Memory Technologies, known as CXMT, were also indicted without detention.
According to prosecutors, CXMT recruited a former Samsung executive shortly after its founding in 2016 and tasked him with building a development team capable of replicating Samsung’s proprietary 10-nanometer-class DRAM process technology. Investigators said the effort involved systematically poaching key engineers, setting up shell companies, rotating offices to evade detection and using coded signals to warn of potential arrests.
In one case, a former Samsung researcher was accused of copying by hand hundreds of detailed process steps — information known as a Process Recipe Plan, or PRP — before joining CXMT. Prosecutors said the transfer gave the Chinese firm access to technology that was, at the time, unique globally.
The investigation also found that CXMT later acquired additional semiconductor process know-how linked to SK hynix through supplier networks, further accelerating its development. Armed with technology traced to South Korea’s two leading memory chipmakers, CXMT succeeded in mass-producing 10-nanometer-class DRAM in 2023, becoming the first Chinese company to do so and the fourth globally.
Prosecutors estimated that Samsung alone suffered revenue losses of about 5 trillion won ($3.7 billion) in 2024 as a result of the technology leakage, with broader economic damage potentially reaching tens of trillions of won over time.
The case has intensified calls within South Korea’s business and legal communities to treat industrial technology leaks not merely as corporate crimes but as threats to national economic security. Some experts have urged the creation of a separate “economic espionage” offense, with tougher penalties and broader investigative powers, to deter foreign-backed efforts to siphon off critical technologies.
The Democratic Party–led government has pledged to strengthen protections for national core technologies as competition in semiconductors and other strategic industries increasingly intersects with geopolitical rivalry.
Kevin Lee (kevinlee@koreabizwire.com)
