2 Former Samsung Executives Arrested for Stealing Tech for China

The logo of the Samsung Electronics Co. at its office in Seoul, South Korea, on Jan. 31, 2023. Ahn Young-joon/AP Photo

Two former Samsung employees in high-level tech positions have been arrested and charged with violating the Industrial Technology Act in South Korea. They are accused of leaking advanced chip technology to develop in China.

The Seoul Metropolitan Police Agency’s Industrial Technology Security Investigation Unit made the arrest on Sept. 6, according to local media.

Choi, 66, was an executive at Samsung Electronics and SK Hynix, and Oh, 60, was a senior researcher at Samsung. Both suspects were identified only by their surnames.

Seoul police had applied for an arrest warrant for Oh in January, but they were denied. After additional police investigation, the Seoul District Court issued arrest warrants for both Choi and Oh and deemed them flight risks.

According to the police, Choi established Chengdu Gaozhen in China, with Oh serving as an executive. The copycat chip plant received funding from the Chinese city of Chengdu. Choi is believed to have recruited other Korean chip experts to join Chengdu Gaozhen, and police are investigating additional technology leaks from ex-Samsung employees.

The two are accused of leaking more than 700 processes used in making 20-nano DRAM semiconductor technology, which Samsung developed in 2014, to develop chip technology in Chengdu, China.

The police estimate that the value of these leaked technologies is about $3.2 billion.

The Chinese Communist Party (CCP) poured $47.5 billion into China’s chip industry just three months ago and has been looking for ways to secure its own advanced chip technology supply since the United States led the way in cutting it off from the international market a few years ago.

Advanced chip technology has made staggering breakthroughs in recent years. The technology is measured in single-digit nanometers, the width of a few dozen atoms, and the advancement means corresponding breakthroughs in military applications. Larger chips are equally vital and found in anything electronic.

The CCP’s increased aggression toward its neighbors and unrelenting military, technological, and financial support to Russia in the Russia–Ukraine war are a few reasons the United States has increasingly restricted China’s access to advanced chip technology. The CCP’s history of intellectual property theft and unwillingness to abide by international ethics agreements when it comes to advanced technologies are additional concerns.

The United States is not the only country concerned with the CCP’s direction for competitive industries.

“We know that based on China’s own reporting, about 60 percent of all new ‘legacy’ chips coming to the market in the next handful of years will be produced by China,” Commerce Secretary Gina Raimondo said at an April press conference in Leuven, Belgium, where she met with European Union representatives to address national security concerns associated with China’s efforts to dominate the chip market.

“And we know there is a massive subsidization of that industry on behalf of the Chinese government, which could lead to huge market distortion, and so that’s why we’re focused on it.”

Frank Fang contributed to this report.