Former Samsung employees arrested for selling trade secrets

Two former Samsung employees have been arrested in connection with a scheme to sell trade secrets from the South Korean tech titan to a rival memory maker in China. Experts believe the leak caused at least 2.3 trillion won ($1.8 billion) in damaged, a figure that could swell should Samsung lose market share in the DRAM segment.

The Korea Economic Daily reports that the two men, with surnames Kim and Bang, were arrested prior to the weekend. According to the publication, Kim was a former Samsung manager that retired in 2016 before starting work at ChangXin Memory Technologies (CXMT).

It is alleged that Kim supplied his new employer with trade secrets regarding the fabrication process and semiconductor deposition tech used to create Samsung's 16nm chips. In exchange, Kim reportedly received millions in annual salary.

Deposition is a critical technology in semiconductor manufacturing, with chemical vapor deposition (CVD) replacing physical vapor deposition (PVD) as the most important.

Currently, Samsung is responsible for roughly 40 percent of the global DRAM market. The transfer also significantly narrowed the tech gap between Samsung as the Chinese company.

According to South Korea's National Intelligence Service (NIS), the leak is one of more than 30 such events that have taken place in South Korea since 2018. That is an increase of fourfold compared to the previous five-year period.

Kim and Bang returned to Korea in October 2023 and were arrested this past Friday. They were charged with violating the Act on the Prevention and Protection of Industrial Technology Leakage.

The Korea Economic Daily said prosecutors plan to ramp up the investigation to see if other accomplices were involved, and look into similar leaks involving Samsung's other fabrication processes. Some would also like to see harsher penalties for those convicted of such crimes, the publication added.

CXMT was founded in 2016 and had over 3,000 employees as of 2019. In 2022, the National defense Authorization Act banned the US government from using or buying memory from CXMT.