Ex Samsung Execs Reportedly Arrested For Alleged IP Theft In China Chip Caper

Two former Samsung employees have reportedly been arrested in South Korea on suspicion they stole more than $3.2 billion in intellectual property to build their own chip factory in China.

Seoul Metropolitan Police is said to have arrested two individuals in connection with the scheme, who were only named by their surnames, according to S. Korean media. The pair allegedly collaborated with Chinese officials to start a joint venture in China, dubbed "Chengdu Gaozhen," with one of the individuals at the head.

A former Samsung executive arrested in the scheme reportedly hired a number of Korean semiconductor experts, including the other arrested individual, a former senior researcher at Samsung Electronics, to work at Chengdu Gaozhen. Those experts were also hired to steal Samsung's 20-nanometer chip technology and other company secrets to duplicate in China, police allege.

The former senior researcher, who reportedly joined Chengdu Gaozhen as head of process design, allegedly played a crucial role in stealing Samsung technology for the Chinese project. 

Police said the economic value of the leaked technologies amounts to about ₩4.3 trillion ($3.2 billion), adding they're also investigating other employees who left Korean firms for Chengdu Gaozhen to determine if more technology was stolen. 

The Register has been unable to independently confirm local media reports of the arrests, and Samsung hasn't responded to requests for comment. 

Possible connection to previous case

Without being able to confirm the full name of the Samsung executive arrested, it's impossible to determine if the arrests are related to a prosecution in a South Korean court last year.

A former Samsung executive was tried last year for stealing information from the South Korean chip giant to set up a chip fab in China, and both that individual and one of the two arrested in the latest case share the same last name. 

Either it's new arrests tied to the same case, or Samsung sure has a Chinese spy problem.

Not that it would be impossible for the same thing to happen twice - industrial espionage seems to be all the rage these days. 

• Ex-senior New York State staffer charged in cash-for-favors scandal with China
• China outspending US, Taiwan, and South Korea combined on chipmaking kit
• China is beating the world at scientific research, think tank finds
• China's chip tech still lags the West – by up to five generations

There's ASML having chipmaking secrets stolen by what's believed to be a Chinese spy last year, a US telecom worker accused of being a Chinese spy for more than a decade, and the recent hiring of a fake North Korean worker by cybersecurity training firm KnowBe4 - and that's just in the US.  

South Korea has also had to deal with North Korea stealing its chip secrets, and other nations have dealt with similar chip IP theft over the years as well. 

Add ever-more chip-related sanctions to the situation, and it's hard to see the situation letting up anytime soon. ®