Samsung frequent target of industrial technology theft

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Gov't urged to toughen punishment of tech thieves

By Baek Byung-yeul

The government is being urged to toughen its legal punishment of people who have leaked crucial industrial technologies of local companies such as Samsung Electronics, as more illegal attempts are being made to steal Korea's advanced technologies, such as semiconductors and displays, as competition between neighboring countries intensifies, industry experts and officials said, Tuesday.

The latest case of industrial technology theft came from Semes, an affiliated company of Samsung Electronics, the No. 1 memory chip maker in the world in sales revenue. The Suwon District Public Prosecutors' Office said Monday that two former employees of Semes were indicted for their alleged involvement in selling a wafer cleaning machine to a Chinese company.

A total of four members, including the two ex-Semes engineers, reportedly pocketed 80 billion won ($62.8 million) by handing over the equipment ― which had been supplied exclusively to Samsung ― to China.

"These technology leaks should not be left up to individual conscience. Chinese companies will try diverse kinds of technology takeover attempts to increase their competitiveness in areas, such as semiconductors, that are lagging behind other countries. Punishment must be strengthened," an official from a local semiconductor industry said.

Industry experts said there is no perfect way to prevent technology leaks, but the government should be more aggressive in raising the level of punishment of people who have leaked technology, as in Taiwan, which created a bill to strengthen punishment for industrial technology leaks.

"It is not easy to ask each company to prevent this leakage problem on their own. It is difficult to even manage employees who have already left companies. Therefore, the government should strengthen its legal punishment of technology leakage as a precaution," Kim Yang-paeng, a senior researcher at the Korea Institute for Industrial Economics and Trade (KIET), said.

"Since there are many cases of Chinese companies attempting to leak technology, the Taiwanese government has specified specific leakage cases and strengthened its sentences to raise awareness. I don't know if this is the right way to do it, but it can be expected to have the effect of informing people that such leakage attempts will result in strong punishments," Kim said.

As he mentioned, Taiwan amended its national security law in April to prevent China from stealing its technology, especially semiconductor-related technology. Under the revised law, those who commit crimes that leak industrial technology will be sentenced up to 12 years and fined up to 100 million Taiwan dollars ($3.36 million).

However, the Korea's level of punishment for industrial espionage is too weak. Under the current law here, people who violated trade secrets can be sentenced to imprisonment for up to three years. The National Intelligence Service said that 99 industrial technology leaks were detected from January 2017 to February 2022.

According to data from the Court of Korea, only 13 out of 115 cases, which were indicted on charges of violating the Trade Secret Protection Act, were sentenced to prison in the first trial in 2021. Also, there has been no single case of imprisonment under the Act on Prevention of Divulgence and Protection of Industrial Technology.

"As seen in this case, technology leakage techniques are becoming more diverse. The government should intensify its management of industrial technology. Otherwise, more Chinese companies could hire former Samsung Electronics or SK Hynix engineers to steal the technology of Korean companies," Kim added.

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