Samsung tech leak suspects allegedly bribed by Chinese firm

A former senior manager at Samsung Electronics Co. and an ex-subcontractor employee are among those accused of receiving several tens of million dollars in kickbacks from China's ChangXin Memory Technologies for illegally transferring Samsung’s 16-nanometer DRAM technologies, according to people with knowledge of the matter on Friday.

The Information Technology Crime Investigation Department of the Seoul Central District Prosecutors' Office was understood to have secured evidence to prove the allegations.

The tech leak caused 2.3 trillion won ($1.8 billion) in estimated damages and significantly narrowed the technology gap between the Chinese DRAM maker and Samsung, the sources said. It generally requires several years to develop a DRAM manufacturing process on a nanometer scale.

The former Samsung manager, identified by his surname Kim, was accused of illicitly transferring the fabrication process and semiconductor deposition technologies used to produce 16 nm chips to ChangXin Memory, after he retired from Samsung in 2016 and moved to the Chinese company.

In return, he allegedly received several million dollars in annual salary, the sources said.

Kim and a second person have been indicted for their involvement in the case and arrested on Friday.

Semiconductor deposition involves depositing particles on the wafer surface as a layer thinner than 1 micrometer (μm) to contain electrical properties.

One micrometer is equal to one-millionth of a meter. Deposition technology is crucial to making semiconductors miniature enough for mobile phones and small electronic devices.

ChangXin Memory, founded in 2016, has been producing DRAMs since 2020. Last month it announced the development of a fifth-generation low-power DRAM.

KEY SUSPECTS

The ex-Samsung manager and the former Samsung subcontractor identified by his last name Bang are key suspects of the 16 nm DRAM technology leak. 

In May, South Korea’s National Intelligence Service (NIS) reported them to prosecutors and called for an investigation.

Upon their return to Korea from China in October this year, the prosecutors' office sought warrants for their arrests on charges of violating the Act on the Prevention and Protection of Industrial Technology Leakage.

Damages from the tech leak could rise if it leads to a fall in Samsung’s market share in the DRAM segment, where it controls about 40%, according to industry watchers.

BROADER INVESTIGATIONS

Prosecutors will step up investigations into the case to seek out other accomplices, as well as other tech leaks involving Samsung’s eight main semiconductor fabrication processes, including deposition technology.  

According to data from the NIS, more than 30 chip-related technology leaks have occurred in South Korea since 2018, a fourfold rise from seven in the five years prior.

Calls are growing for harsher punishments against tech thieves in Korea who are seen to get just slap on the wrist for their crimes, compared to penalties in other countries.  

Write to Yong-Hoon Kwon and Ik-Hwan Kim at fact@hankyung.com
 

Yeonhee Kim edited this article.