A former government at Samsung Electronics has been arrested and indicted in South Korea for allegedly stealing the main chipmaker’s know-how with a view to construct a copycat plant in China.

The indictment of the 65-year-old Korean nationwide, who had additionally served as a vice chairman at rival Korean chipmaker SK Hynix, comes as South Korea makes an attempt to beef up its defenses in opposition to a concerted marketing campaign by Chinese language corporations to amass cutting-edge Korean applied sciences.

In accordance with a press release launched by Korean prosecutors on Monday, the previous Samsung vice chairman, who has not been named, illegally acquired info wanted to construct superior chipmaking amenities.

His plan, stated prosecutors, was to duplicate a semiconductor manufacturing unit simply 1.5 km away from Samsung’s reminiscence chip plant in Xi’an in western China.

“This isn’t a easy semiconductor tech leak however an try to repeat an entire chip plant,” the Suwon District Prosecutors’ Workplace stated in a press release.

“The scope of the crime and injury are incomparable to earlier particular person tech leak circumstances,” the assertion added. “If the home plant had been copied and related high quality of merchandise had been mass-produced in China, it might have precipitated irrecoverable losses to the [Korean] semiconductor trade.”

The previous government employed about 200 workers from Samsung and SK Hynix for a corporation he established in Chengdu in China’s Sichuan province. They had been allegedly tasked with buying commerce secrets and techniques from their former employers, costing Samsung an estimated $230 million, in keeping with the indictment.

“Samsung strictly forbids outsiders from getting into its chip crops as a result of the manufacturing unit design and its gear format are carefully associated to productiveness and product high quality,” stated Lee Dong-hwan, a former state investigator now working as a patent legal professional at WeFocus, a Seoul-based legislation agency.

“However there isn’t any approach for the corporate, regardless of its robust safety techniques, to stop tech leaks if a senior government with good entry to broad and high-quality info deliberately provides it out to Chinese language opponents,” he added.

Samsung Electronics and SK Hynix, two of the world’s main reminiscence chipmakers, each have crops in China. Their applied sciences are regarded by trade consultants as extra superior than these of their main Chinese language opponents.

Final yr, the US authorities gave the Korean corporations a one-year reprieve from export controls that had been designed to cut back China’s capacity to develop high-end chips. The FT reported final month that Washington had signaled it might prolong permission for them to ship US chipmaking instruments to China for a minimum of one other yr.

Among the many commerce secrets and techniques the previous government is alleged to have stolen was info regarding preserving impurities out of superior chip crops, and the ground plans and dimensions needed for a number of processes in superior chipmaking applied sciences.

However his plan fell aside after he did not safe a $6.2 billion funding allegedly promised by an unnamed Taiwanese firm for a corporation he established in Singapore.

As a substitute, he raised simply over $350 million from Chinese language traders to supply trial merchandise from a plant in Chengdu. In accordance with prosecutors, the Chengdu plant’s development was additionally based mostly on know-how stolen from Samsung.

Six different individuals had been additionally indicted on Monday as a part of the identical case, together with the worker of a Samsung subcontractor and 5 workers of the manager’s Chinese language chipmaking firm.

As tech competitors between the US and China intensifies, Chinese language corporations have stepped up efforts to amass Korean experience in important applied sciences starting from semiconductors to electrical automotive batteries and in industries together with shows and shipbuilding.

In February, seven individuals, together with former workers of Semes, a subsidiary of Samsung Electronics specializing within the manufacturing of wafer cleansing gear, got jail sentences for transferring stolen applied sciences to a Chinese language firm.

The South Korea authorities has additionally established a number of new investigatory our bodies to fight the leaks, handed laws to toughen punishments, and made it simpler to report suspected violations.

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