A former executive of Samsung Electronics has been indicted by South Korean prosecutors over allegations of stealing the company's technology to establish a chip factory in China. The individual, who had previously held a vice president position at SK Hynix, is accused of illicitly acquiring Samsung's data between 2018 and 2019 to construct a factory in Xian, China, according to a statement released by the Suwon District Prosecutors' Office.
The trial date for the indicted individual has yet to be confirmed by the local court where the indictment has been filed. Currently, the defendant, who was apprehended last month, denies the allegations made against him, as confirmed by a prosecutor involved in the case. Although the accused worked for a combined total of 28 years at the South Korean chipmakers, officials have chosen not to disclose his identity.
Reaching out to the indicted individual for comment proved to be unsuccessful at the time of reporting, as Reuters was unable to establish contact.
Prosecutors state that the former Samsung executive attempted to build the chip factory in Xian, approximately 1.5 kilometres (1 mile) away from Samsung's existing chip manufacturing facility, following the establishment of a semiconductor company. However, due to financial constraints, the endeavour to construct the new plant utilizing Samsung data ultimately failed.
In addition to the former executive, six other individuals have been indicted for their alleged involvement in the crime. One of them is an employee of an inspection company, accused of leaking the architectural plan of Samsung's semiconductor factory.
The prosecutors estimate that the theft of data has caused losses amounting to at least 300 billion won ($233 million) for Samsung Electronics. The Suwon District Prosecutors' Office commented, "It is a serious offence that could severely impact our economic security by undermining the foundation of the domestic chip industry, especially in the face of escalating competition in chip manufacturing."
Both Samsung Electronics and SK Hynix declined to provide comments on the matter.
This indictment comes at a time when South Korea has pledged to enhance support for its chip sector. South Korean President Yoon Suk Yeol has referred to the competition in the industry as an "all-out war," particularly in the context of escalating tensions between China and the United States.
Samsung and SK Hynix, the two leading global manufacturers of memory chips, have made significant investments in chip factories in China, amounting to billions of dollars.