The Korea Herald


[Editorial] Punish tech theft sternly

Ex-Samsung exec indicted for stealing secrets to build copycat plant in China

By Korea Herald

Published : June 15, 2023 - 05:30

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Semiconductor technology and industry are a field where the United States and China are vying fiercely for hegemony. They also account for the largest portion of South Korea’s exports. Semiconductor technology is expected to prop up its economy for decades to come. Then its semiconductor technology got almost stolen altogether.

A former senior executive of Samsung Electronics was recently arrested and indicted for stealing its trade secrets to build a copycat chip plant in China. Six others who worked for the executive were also indicted

The former executive attempted to build a complete copy of Samsung's semiconductor factory in Xian, western China after illegally acquiring the company's confidential data including basic engineering data, process layout and design drawings.

He had won two contracts to receive investments of 460 billion won ($360 million) from China’s Chengdu City and 8 trillion won from a Taiwanese electronic appliances company for the envisioned chip plant. The Taiwanese company broke its promise. But he succeeded in producing trial products with the funding from Chengdu.

This may be the tip of an iceberg. The National Office of Investigation at the National Police Agency said Sunday that it found 35 cases of industrial technology theft in a four-month crackdown from February to May. Eight of them were leaked to China and other foreign countries.

According to the National Intelligence Service, 93 cases of industrial technology leakage to foreign countries were uncovered for five years from 2018 to 2022. Twenty-four cases, or about a quarter of them, were related to semiconductors. The remaining 69 cases involved displays, secondary batteries, automobiles, information technology and shipbuilding. The tech leakages the agency uncovered were estimated to be worth 25 trillion won.

A retiree of a domestic shipbuilding company was indicted in 2021 on charges of handing over core technological data on high value-added vessels to a Chinese rival company.

An employee of a precision materials company was caught trying to steal designs for a glass substrate in order to move over to a Chinese firm. The employee was sentenced to two years in prison last November.

In 2015, about 130 trade secrets of Hyundai and Kia including design drawings were found to have been handed over to a domestic company that was designing Chinese cars. If they were actually used in designing Chinese cars, the Korean automakers would have suffered damage of 700 billion won over three years.

The Prevention of Divergence and Protection of Industrial Technology Act stipulates a sentence of three years or more in prison or 1.5 billion won or less in fine for leakage of strategically important industrial technologies to foreign countries and 15 years or less in prison or 1.5 billion won or less in fine for the leakage of lesser technologies.

However, actual punishment did not seem so strong. For eight years from 2015 to 2022, 365 people received prison sentences for leaking technology, but 80 percent of them were put on probation, with only 73 people actually serving their sentences.

Punishment should be severe to prevent people from succumbing to the temptation to make money easily. It is hard to expect a preventive effect from a slap on the wrist.

High technology is an important source of national competitiveness. That is why competition for technology on the global stage is becoming ever fiercer. South Korean companies have secured world-leading technologies in many fields including semiconductors. It was a result of decades of enormous investment and incessant research.

For the first time as a business lobby, the Federation of Korean Industries recently presented a written opinion to the Supreme Court, suggesting it should strengthen sentencing guidelines for the crime of stealing high technology to benefit foreign companies.

The top court must review the suggestion positively. It would be useless developing unrivaled technology if it is not protected from theft.