In a major blow to South Korea's tech sovereignty, prosecutors have arrested ten former employees of the semiconductor giant Samsung Electronics. The group stands accused of leaking highly sensitive 10-nanometre (nm) DRAM technology to Chinese chipmaker ChangXin Memory Technologies (CXMT).
The Anatomy of a Major Tech Heist
The arrested individuals include a former executive and five key development staff members. They have been charged with violating South Korea's Industrial Technology Protection Act. Authorities believe this intellectual property theft is directly responsible for a staggering 5 trillion won decline in Samsung Electronics' sales last year. They further warn that future national economic losses could run into trillions more.
The investigation revealed a calculated approach by CXMT. Shortly after its founding in 2016, the Chinese firm began aggressively recruiting key personnel from Samsung. At that time, Samsung was the sole company in the world mass-producing 10-nm DRAM. The arrested section heads, who were directly responsible for research and development, provided CXMT with the critical technical expertise needed to bridge the gap with South Korean leaders.
How the Leaked Information Helped China's Chip Ambitions
The stolen information reportedly enabled CXMT to manufacture China's first 10 nm DRAM chip in 2023. Prosecutors assert that this illicitly obtained intellectual property laid the groundwork for the Chinese firm to begin volume production of HBM2 memory in 2024. Market research indicates CXMT now aims to capture up to 15% of the specialty memory market, posing a direct competitive threat to market leader Samsung.
A former Samsung executive, identified as "Mr A," is said to have led the 10-nm DRAM technology work for CXMT. Another key figure, "Mr B," who was involved in the research, allegedly copied vital DRAM manufacturing data. In a bid to avoid detection in an industry with stringent digital security, "Mr B" manually transcribed 12 pages of critical information by hand, avoiding digital copies or smartphone photographs that could trigger alarms.
A Recurring Pattern of Tech Espionage
This incident is not isolated. Earlier this year, a former SK hynix employee was apprehended while attempting to board a flight to China. In a separate case, an engineer received an 18-month prison sentence for trying to sell information to Huawei. Furthermore, in 2024, two former Samsung executives were arrested for allegedly stealing confidential data to establish a chip factory in China.
However, the current case is said to be more extensive in scale and sophistication. The group reportedly used shell companies to transfer information and frequently changed office locations to evade authorities. Prosecutors noted the suspects operated with extreme caution, working under "the assumption that the National Intelligence Service is nearby" and even employing cryptography for emergency communications.
This arrest underscores the intense and high-stakes battle for technological supremacy in the global semiconductor industry, with South Korean firms repeatedly finding themselves targets of corporate espionage aimed at accelerating China's domestic chip capabilities.
