Trial Begins Of Samsung Executive Accused Of Stealing Chip Secrets

The trial began on Wednesday of a South Korean chip executive accused of stealing sensitive information developed by Samsung Electronics.

South Korean prosecutors claim 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 Xian, China near an existing Samsung plant.

Choi Jinseog has protested his innocence and has previously said the planned factory was for early test production of DRAM memory chips and was substantially different from the existing Samsung plant in Xian that makes NAND flash memory.

Protests of innocence

DRAM manufacture is more than 30 percent different from NAND as it is more complicated, and some equipment used in manufacturing the two types of chips is also different, Choi has previously said.

The plant was intended for research purposes, unlike Samsung’s plant which is aimed at mass production and contains no R&D facility, Choi said.

Choi previously said the planned Foxconn plant – which was never built after Foxconn pulled out – was intended for Qingdao and not Xian, although Xian was one of the cities evaluated.

He previously said through his lawyer that the information he gathered in preparing to build the plant was non-sensitive data that was easily available to anyone in the chip supply chain

But South Korean prosecutors have accused Choi of illegally obtaining “core national technology” for unauthorised export and alleged he caused $200 million (£157m) in damages to Samsung.

The export of chip technology to China is currently a sensitive issue as the US pressures allies including South Korea and Japan to bar China from advancing its semiconductor industry.

Industrial espionage

The trial of Choi is an example of South Korea’s crackdown on industrial espionage and slow China’s progress in chip manufacturing, Reuters reported.

According to Reuters Choi was an award-winning engineer once seen as a star in South Korea’s chip industry.

Choi remains in custody in Suwon, a city south of Seoul where Samsung has its headquarters. He reportedly attended the hearing in his beige prison uniform and denied all the charges.

“The defendant (Choi) never used or gave orders to use Samsung Electronics’ data,” Kim Pilsung, Choi’s lawyer, was quoted by Reuters as stating, adding that what prosecutors claimed Choi had stolen were neither business secrets nor national core technology.

Choi briefly said “yes” when asked by a judge whether he agreed with his lawyer.

Prosecutors have also charged five former employees at Choi’s chip consultancy firm, Jin Semiconductor, and a former employee at a Samsung contractor.

According to Reuters, the courtroom at the Suwon district court was packed with dozens of people including Choi’s families and friends.