Key Samsung tech leaked to top rival in semiconductorsKey semiconductor technology at Samsung Electronics, Korea’s largest company by market value, has leaked to rival Hynix Semiconductor since 2005, prosecutors said yesterday.
Seoul Eastern District Prosecutors’ Office arrested with detention three people allegedly linked to the case: U.S.-based semiconductor parts supplier Applied Materials (AMAT) vice president, Gwak, 47; the head of the company’s Korean branch, Kim, 42; and Hynix Semiconductor executive director Han, 51.
Fifteen other employees from three companies, including a Samsung Electronics manager Nam, 37, have been booked without detention.
“Our core technology regarding our semiconductors, a major export division [in Samsung], has been leaked through a foreign parts supplier with the great possibility that the information has been transferred to other foreign semiconductor companies,” said a Samsung spokeswoman. “We fear that this will lead ultimately to a national loss.”
Hynix says the leak is not connected to the entire company and was an accidental mistake by some of its employees. Also, company officials said that the leaked technology was not used during the making of their products.
Gwak and Kim have been charged with taking 95 secret documents and information regarding the production of dynamic random access memory chips and NAND flash memory chips from Samsung Electronics and handing 13 of them to employees at Hynix. Han is charged with taking nine such confidential documents.
AMAT supplies parts to both Samsung Electronics and Hynix.
The confidential information taken includes not only Samsung’s semiconductor production technology but production line investment plans, next generation memory chip development plans and partner companies’ data, according to prosecutors. They said that those involved took the documents from Samsung employees during their frequent visits to the company’s factory. Prosecutors added that Samsung manager Nam met with an employee from AMAT in April 2008 in a hotel in Silicon Valley in California and gave him confidential Samsung files regarding DRAM and NAND flash chip production and investments.
The case is expected to be a major blow to Hynix, which had recently ended another round of bidding with no buyers stepping forward. The sale of Hynix has been shaky for some time. Last November, the Hyosung Group, which had been the sole bidder during the first auction, backed out.
Hynix officials said that they had been using their own copper processing technology since last February to make 44-nanometer NAND flash chips. Prosecutors say the charged Hynix employees received the copper processing technology the AMAT employees retrieved from Samsung in May. During the first part of the decade, Hynix suffered from a slowdown in the chip market. In 2001, the company was put under creditor supervision due to high debt. It exited the workout in 2005. Last year, the company swung back into the black, with an operating profit of 192 billion won ($167 million) and became the second largest memory chipmaker in the world after Samsung.
Prosecutors said that whether Hynix had any intention of receiving information about the technology in question is still not clear and that further investigation is needed.
They added that this case appears to have no direct relation with the recent death of a Samsung Electronics vice president. Late last month, the executive, who was an integral part of the company’s semiconductor division, was found dead in front of his apartment building in Seoul. Police said they suspect he committed suicide.
By Cho Jae-eun, Shim Jae-woo [firstname.lastname@example.org]
More in Social Affairs
Civic group sues Seoul gov't to stop Gwanghwamun project
Injunction gives Yoon his job back, at least temporarily
New virus cases stay below 500, but officials say surge isn't over
[Shifting the paradigm] Academia faces brave new world