South Korea Claims Former Samsung Employee Stole Chip Secrets

Indictment by South Korean prosecutors claims former Samsung employee tried to use stolen Samsung secrets in China chip plant deal

A sealed indictment by South Korean prosecutors claims that former Samsung executive Choi Jinseog stole secrets from the company via its supplier network to help Taiwan’s Foxconn set up a chip factory in China, Reuters reported.

The 18-page indictment was announced on 12 June, with prosecutors saying the theft of trade secrets cost Samsung Electronics more than $200 million (£157m).

But prosecutors gave limited details at the time and did not name Choi, although other media outlets later named Choi and said he had links with Foxconn.

Choi, who has been in prison since late May as he awaits a trial set to begin on 12 July, denied the charges through his lawyer.

Seoul, South Korea. Image credit: Ethan Brooke/Pexels
Seoul, South Korea. Image credit: Ethan Brooke/Pexels

Corruption claims

The indictment, which Reuters said it has viewed, claims Choi’s Singapore-based consultancy Jin Semiconductor won the contract with Foxconn around August 2018.

Choi then poached “a large number” of employees from Samsung and its affiliates and illegally obtained secret information related to chip plant construction from two contractors, the document alleges.

Jin Semiconductor allegedly obtained confidential information related to semiconductor cleanroom management from Cho Young-sik, who worked at Samsung contractor Samoo Architects & Engineers, and blueprints of a massive 2012 Samsung plant in Xian, China from Chung Chan-yup, an employee at contractor HanmiGlobal.

Choi’s lawyer said that cleanroom design information was available through international engineering standards and that the layout of the Xian plant was available through a Google Maps satellite photo.

China chip tech

The proposed Foxconn plant was never built after the Taiwanese firm pulled out, according to the report.

Foxconn said it was “aware of speculation” around the case in South Korea but did not comment on ongoing investigations, adding that it abides by relevant laws and regulations. Samsung declined to comment.

The indictment does not accuse Foxconn, Samoo or HanmiGlobal of wrongdoing. Former Samoo employee Cho was not charged while former HanmiGlobal employee Chung has been charged by South Korean proescutors with leaking business secrets.

The Foxconn plant was to manufacture semiconductors using 20-nanometre DRAM memory chip technology, which while far from cutting-edge is considered a “national core technology” by South Korea and is restricted from being transferred overseas without government authorisation.

The transfer of such technologies has become a political hot-button issue as the US tries to prevent China from advancing its chip industry.