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A couple of weeks back, a former Samsung executive was indicted on charges of stealing chip secrets and leaking them to a rival company in China. Prosecutors didn’t name the person when they announced the indictment on June 12, nor they revealed the Chinese firm in question. We now have both details, as well as more information about the whole matter. According to a Reuters report, the accused former Samsung executive is Choi Jinseog. He reportedly tried to use the stolen secrets to set up a chip factory for Foxconn.
Choi Jinseog worked at Samsung for 17 years before stealing chip secrets
Choi Jinseog is a 65-year-old semiconductor expert who worked at Samsung for 17 years. He oversaw the development of DRAM memory chips and also worked on wafer processing technology. He won several internal awards from the company before leaving in 200. Choi subsequently joined another South Korean semiconductor firm SK Hynix (formerly Semiconductor). He worked there for more than eight years, serving as the chief technology officer and helping the company return to profitability.
But it has since been downhill for Choi, who was once seen as a star in South Korea’s chip industry. In 2018, his Singapore-based consultancy Jin Semiconductor won a contract to help build a chip factory for Foxconn in China. To make his work easier, Choi tapped Samsung’s supplier network to steal secrets. He got in contact with “a large number” of Samsung employees, including some from its affiliates. He managed to obtain information related to building a chip factory from two of the company’s contractors.
Cho Young-sik, who worked at Samsung subsidiary Samoo Architects & Engineers, provided Choi with confidential information on semiconductor cleanroom management. Cleanrooms are enclosed areas where chips are manufactured. These areas are free of dust and other impurities. Samoo helped Samsung in the construction of its chip plant in Xian, China, in 2012. Chung Chan-yup, an employee at HanmiGlobal, which supervised the construction, helped Choi obtain blueprints of the factory.
Foxconn’s chip factory was never built
Choi planned to use the stolen data and secrets to help its client Foxconn build a chip factory in China. The factory was supposed to have a capacity of 100,000 wafers per month for 20nm DRAM memory chip production. Foxconn had set aside a budget of over 8 trillion won ($6 billion) for the factory, with Choi’s consultancy firm earning several million dollars every month for its services. However, Foxconn ended the contract just a year after signing it. The company eventually pulled out of the plan and did not complete the construction.
However, Samsung considers the information that Choi obtained “strictly confidential.” South Korea also considers sub-20nm chip technologies “national core technology” and prohibits the transfer of such technologies overseas unless legally approved through licensing or partnership. Choi’s actions may have helped the Chinese chip industry. But the former Samsung executive denies any wrongdoing. His lawyer Kim Pilsung suggested that Choi may be a scapegoat caught in the rivalry between the US and China.
South Korea is trying to strengthen its semiconductor industry amid the growing tensions between the two countries, seeking to slow China’s progress. Kim argued that engineering standards to make cleanrooms are already available publicly. Samsung isn’t the only company doing it. “A factory layout? You can take a snapshot from Google Maps, and experts would know what is inside which building,” Kim said, showing a satellite snapshot of Samsung’s plant in Xian, China. Choi, who has been in jail since late May, did not steal a secret, Kid suggested.
Foxconn, Samoo, and HanmiGlobal are not accused of any wrongdoing
The indictment doesn’t accuse Foxconn, Samoo, and HanmiGlobal of any wrongdoing. Samoo’s former employee Cho Young-sik was also not charged, but HanmiGlobal’s Chung Chan-yup has been charged with leaking business secrets. In total, South Korean lawmakers have indicted seven individuals in the case. The other five are former and current Jin Semiconductor employees.
All of the companies said that they are aware of the ongoing case in South Korea and maintain that they have no involvement. “We abide by laws and regulations governing jurisdictions we operate in,” Foxconn added. Samsung declined to comment on the matter, citing the ongoing investigations. A trial of the case will begin on July 12. We will let you know as we have more information on the matter.
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