South Korean prosecutors have arrested a former Samsung Electronics executive. The unnamed ex-exec, taken into custody last month, is charged with stealing trade secrets and attempting to use that information to build a new, copycat chip plant in China. The Suwon District Prosecutor’s Office announced its indictment of the unidentified 65-year-old defendant in a Monday statement, according to numerous reports.
Gizmodo reached out to the prosecutor’s office for independent confirmation and comment, as well as Samsung’s press office, but did not hear back by publication time.
The former tech bigwig reportedly worked at Samsung, one of the largest chip makers in the world, for 18 years and another South Korean chipmaker, SK Hynix, for an additional decade. Then, he started up new chip companies in China and Singapore, poaching about 200 former Samsung and Hynix employees in the process, according to prosecutors.
In addition to the workers, the defendant also allegedly stole Samsung company confidential information including blueprints, “basic engineering data,” and clean room designs from August 2018 to 2019. He “attempted to duplicate an entire factory to manufacture and mass-produce semiconductors in China,” the prosecutors wrote in their statement, per AP.
The would-be copy/pasted plant was slated for construction less than a mile away from Samsung’s factory in Xian, China. However, the facility was never built, after $US6.2 ($9) billion in promised investment from a Taiwanese company fell through, according to Yonhap News Agency, a major South Korean outlet. The illicitly obtained corporate secrets were estimated to be worth about $US233 million for Samsung.
“It’s a grave crime that could deal a heavy blow to our economic security by shaking the foundations of the domestic chip industry at a time of intensifying competition in chip manufacturing,” the prosecutor’s office additionally said, according to Reuters.
Six others, on top of the exec, have been indicted on charges related to the same alleged scheme. These include a Samsung contractor who is accused of leaking architectural plans and five employees of the Chinese chip company begun by the primary defendant.
South Korea is especially protective of its proprietary technologies — particularly those related to the semiconductors used in its chips. These account for 17% of the country’s total exports, according to AP. Last year, Samsung made big strides in advanced chip tech, by beating out Taiwanese competitor TSMC and becoming the first manufacturer to produce 3-nanometre chips. The new indictments and charges of stolen intellectual property come amid an ongoing chip shortage and rising trade tensions between China and the U.S.