A court in South Korea has convicted seven former Samsung employees of stealing semiconductor technology and then transferring it to Chinese companies.
As The Wall Street JournalThe Wall Street Journal reports, all seven former employees worked for Samsung Electronics subsidiary SEMES Co. Ltd., which is Korea's largest semiconductor and display equipment manufacturer.
The technology stolen included equipment design blueprints and component lists which were extracted from photos the workers "misappropriated" from files over a two-year period between 2018-2020. The information related to semiconductor cleaning equipment and some of it is classed as “national core technologies” protected by South Korean laws.
One of those found guilty is identified by the surname Nam and worked as a researcher at SEMES. They used the stolen information to form a rival company to produce cleaning equipment with the stolen SEMES technology. A total of 14 cleaning machines were manufactured and sold to Chinese firms and a Chinese research institute, which netted Nam's company $59.8 million.
Nam also formed a joint venture with a Chinese company in 2020 and transferred the technology over, which included some 24 semiconductor cleaning equipment blueprints. The other six former employees all helped in the theft of the technology and in return received shares in this joint venture.
The prison sentences handed down by the Suwon District Court this week include a four-year term for Nam and up to two-and-a-half years for each of the other six individuals. Nam's company has also been fined roughly $768,000 for illegally using technology owned by SEMES.
As part of the ruling the court stated:
"If such crimes are punished lightly, companies will not have an incentive to devote long periods of time and resources to technology development ... It will also create an outcome where competing foreign firms easily steal technology that Korean companies have built up with great effort under the guise of talent recruitment."
This incident will do little to help China's argument that US sanctions relating to advanced chip technology are unwarranted. It's also not a new problem, with examples of technology being stolen and used to setup rival firms in China dating back several years.