Former Samsung exec accused of stealing data to build copycat chip plant in China

A former executive of Samsung Electronics stole the juggernaut’s confidential semiconductor data to build a copycat chip facility in China, South Korean prosecutors alleged on Monday.

The 65-year-old defendant, who also previously worked for Korean chipmaker SK Hynix, has been arrested. He has been accused of violating industrial technology protection laws and stealing trade secrets from 2018 to 2019 to establish a copy of Samsung’s semiconductor plant, just 1.5 kilometers away from Samsung chip factory in Xi’an, China.

The ex-Samsung exec’s attempt to build the copycat chip plant allegedly fell through after his backer, purportedly an undisclosed Taiwanese company, canceled more than a $6 billion (approximately 8 trillion won) investment into the project, prosecutors said. Instead, he received capital from investors in China and Taiwan to produce trial chip products based on Samsung’s technology.

The indictment comes amid escalating tension between the U.S. and China over semiconductors.

The suspect, who has been working in the semiconductor industry for more than 25 years, founded two chip facilities in China and Singapore and hired over 200 semiconductor professionals from Samsung and SK Hynix in South Korea. Prosecutors said the stolen data from Samsung could take its toll of at least $233 million (300 billion won) on Samsung.

This is not just a leak of semiconductor technology, as the company tried to replicate a whole semiconductor factory, according to prosecutors. “It is a serious crime that could deal a heavy blow to the foundation of the domestic semiconductor industry at a time of cut-throat competition for chip production,” the prosecutor’s office said.

Prosecutors indicted six other people who are allegedly ex-Samsung official’s accomplices. Samsung declined to comment on it.