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Ex-Samsung executive accused of audacious chip factory plan

People stealing trade secrets from their old workplace is nothing new, but the idea of taking information to construct an exact copy of an entire factory and its technology just a mile from the original one takes the nefarious practice to a whole new level.

An ex-Samsung executive has been accused of doing just that when he allegedly attempted to construct a replica semiconductor plant using information stolen from the Korean tech giant.

Prosecutors in South Korea this week indicted the 65-year-old former executive, accusing him of stealing Samsung technology between 2018 and 2019 and setting up a semiconductor company to run a factory that was supposed to be built just 1 mile (1.5 kilometers) from the Samsung-operated chip production plant on which it was based, in Xian, central China.

But the audacious plan suffered a setback after a Taiwanese company failed to invest a promised 8 trillion won (about $6.2 billion) in the project, the Korea Times reported.

Pressing on, the project managed to secure an investment worth 460 billion won (around $360 million) from interested parties in China, enabling it to produce trial chips at a different plant, allegedly using knowledge of Samsung technology.

The plant reportedly hired around 200 people from Samsung and SK Hynix, the world’s second-largest memory chipmaker after Samsung. The former Samsung executive is alleged to have told his employees to obtain and use Samsung’s semiconductor design data and other trade secrets at their new company.

Prosecutors have also indicted six others in connection with the alleged crime, among them a person accused of leaking the architectural plan of Samsung’s semiconductor factory.

The alleged technology leaks caused Samsung to suffer estimated damage of at least 300 billion won (around $235 million), the Korea Times reported.

“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 prosecutor’s office said, adding that if the project had succeeded, it would have caused Samsung “irreparable damage.”

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Trevor Mogg
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