A
former
executive
at
South
Korea’s
Samsung
Electronics
was
indicted
on
suspicion
of
stealing
company
technology
for
a
copy-cat
chip
factory
in
China
and
jeopardising
national
economic
security,
prosecutors
said.
South
Korea
is
a
chipmaking
powerhouse,
increasingly
pressed
by
the
geopolitical
and
economic
rivalry
between
the
United
States
and
China.
Last
week,
President
Yoon
Suk
Yeol
described
chip
industry
competition
as
“all-out
war”.
The
defendant,
who
also
formerly
worked
at
SK
Hynix
as
a
vice
president,
is
accused
of
illegally
acquiring
Samsung
data
to
build
a
rival
factory
only
1.5
km
away
from
a
Samsung
chip
manufacturing
facility
in
Xian,
China,
the
Suwon
District
Prosecutors’
Office
said
in
a
statement.
Prosecutors
said
they
estimated
the
theft
of
data
to
have
caused
at
least
300
billion
won
($345
million)
worth
of
losses
for
Samsung
Electronics.
“It’s
a
grave
crime
that
could
deal
a
heavy
blow
to
our
economic
security
by
shaking
the
foundation
of
the
domestic
chip
industry
at
a
time
of
intensifying
competition
in
chip
manufacturing,”
the
prosecutors’
office
said.
The
defendant,
arrested
last
month,
is
denying
the
allegations,
a
prosecutor
said.
The
suspect,
who
officials
did
not
identify,
worked
a
combined
28
years
at
the
South
Korean
chipmakers,
prosecutors
said.
Reuters
was
not
immediately
able
to
reach
him
for
comment.
Samsung
Electronics
and
SK
Hynix
declined
to
comment.
The
trial
date
had
yet
to
be
confirmed
by
the
court
in
which
the
indictment
has
been
filed.
The
attempt
to
build
the
new
plant
using
Samsung
data
between
2018
and
2019
ended
in
failure
due
to
funding
issues,
a
prosecutor
said.
Prosecutors
said
they
had
indicted
six
other
people
for
their
suspected
involvement,
including
an
inspection
company
employee
accused
of
leaking
the
architectural
plan
of
Samsung’s
semiconductor
factory.
Police
action
The
indictment
comes
as
South
Korea
has
vowed
to
step
up
support
for
its
chip
sector.
Samsung
and
SK
Hynix,
the
world’s
top
two
makers
of
memory
chips,
have
invested
billions
of
dollars
in
chip
factories
in
China.
While
Samsung
and
SK
Hynix
depend
on
US
technology
and
equipment,
about
40
percent
of
South
Korea’s
chip
exports
go
to
China,
trade
ministry
data
showed.
Although
China
was
a
latecomer
to
memory
chip
production,
its
firms
have
caught
up
rapidly
to
South
Korean
competitors.
Seoul-based
analysts
estimate
a
technology
gap
of
only
two
years
or
less
between
NAND
Flash
chips
made
by
China’s
YMTC
and
industry
leaders
such
as
Samsung
Electronics
and
SK
Hynix.
The
South
Korean
firms
have
a
practice
of
developing
a
cutting-edge
chip
in
South
Korea
first,
then
only
making
them
in
their
China
factories
after
a
year
or
so,
partly
to
stave
off
leaks
of
the
latest
technology,
the
analysts
said.
South
Korea
has
been
cracking
down
on
corporate
spying
in
recent
months.
On
Sunday,
police
said
they
had
arrested
77
people
involved
in
35
cases
of
suspected
industrial
espionage
in
a
nationwide
investigation
over
the
past
four
months.
“We
will
sternly
deal
with
any
leakage
of
our
technology
abroad
and
strongly
respond
to
illegal
leak
of
domestic
companies’
core
technologies
in
semiconductor,
automobile
and
shipbuilding
sectors
among
others,”
a
national
police
official
said
in
a
statement.
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