Ex-Samsung Exec and Colleague Arrested Over Massive Semiconductor Espionage Case

[hskuo]

A former Samsung executive has been arrested for allegedly stealing semiconductor technology to establish a company in China, the Seoul Metropolitan Police Agency's Industrial Technology Security Investigation Unit announced on September 9. The individuals arrested are Choi, the CEO of Chinese semiconductor manufacturer Chengdu Gaozhen (CHJS), and Oh, the head of process design.

Choi, who previously served as an executive at Samsung Electronics and Hynix Semiconductor (now SK Hynix), is reported to have stolen key process technologies independently developed by Samsung Electronics for the production of 20-nanometer DRAM semiconductors. In September 2020, Choi established Chengdu Gaozhen in collaboration with a local Chinese government and recruited domestic semiconductor experts, including Oh, a former senior researcher at Samsung Electronics, to leak and illegally use Samsung Electronics' core memory semiconductor technology.

Oh moved to Chengdu Gaozhen and worked as the head of process design, playing a crucial role in leaking Samsung Electronics' core technology. By April 2022, Choi had produced basic development products to measure their functionality as actual semiconductors.

The police explained that the economic value of the leaked 20-nanometer process development technologies from Samsung Electronics amounts to 4.3 trillion won (approximately $3.3 billion). They are also investigating other employees who moved from domestic companies, including Samsung Electronics, to Chengdu Gaozhen to determine if there were additional technology leaks.

A police official stated, "This case has shaken the foundation of economic security by attempting to produce semiconductors with domestic technology through direct collaboration between a former executive of a domestic semiconductor company and a local Chinese government, leading to a potential weakening of national competitiveness."

출처 : Businesskorea(https://www.businesskorea.co.kr)

Ex-Samsung Exec and Colleague Arrested Over Massive Semiconductor Espionage Case

A former Samsung executive has been arrested for allegedly stealing semiconductor technology to establish a company in China, the Seoul Metropolitan Police Age

www.businesskorea.co.kr

 

[Barnsley]

Tough gig!

 

[samwilde]

Insight: Indictment details plan to steal Samsung secrets for Foxconn China project

When former Samsung executive Choi Jinseog won a Foxconn contract, he tapped his former employer's supplier network to steal secrets to help his new client set up a chip factory in China, an indictment says.

www.reuters.com

The South Korean ‘master’ of chips accused of sharing secrets with China

Choi Jin-seok denies stealing Samsung technology. But the case underscores how the country is torn between geopolitical rivals

www.ft.com

For what it's worth 20nm is not considered leading edge and Chinese companies like CXMT have better DRAM technology than that. He also left Samsung in 2001 and SK Hynix in 2010. So I don't know what kind of corporate secrets he is supposed to have.

 

[Barnsley]

Insight: Indictment details plan to steal Samsung secrets for Foxconn China project

When former Samsung executive Choi Jinseog won a Foxconn contract, he tapped his former employer's supplier network to steal secrets to help his new client set up a chip factory in China, an indictment says.

www.reuters.com

The South Korean ‘master’ of chips accused of sharing secrets with China

Choi Jin-seok denies stealing Samsung technology. But the case underscores how the country is torn between geopolitical rivals

www.ft.com

For what it's worth 20nm is not considered leading edge and Chinese companies like CXMT have better DRAM technology than that. He also left Samsung in 2001 and SK Hynix in 2009. So I don't know what kind of corporate secrets he is supposed to have.

It doesnt matter whether leading edge or not.

What I dont get is what do Companies think happen when someone leave and go work elsewhere?

They go full "Men in Black" and wipe their memory.

Anyone who move is going to bring some knowledge with them , otherwise what was the point in hiring them?

 

[samwilde]

Exactly. He worked for several years in the solar cell business after leaving SK Hynix in 2010, and then he moved back into DRAM in China in 2015. Even people who sign confidentiality clauses typically have a time limit. And in his case he resigned from SK Hynix apparently. Probably got zero severance package. Sounds more to me like they are trying to make an example out of him.

It will also be hard to show that he caused to damages to these South Korean DRAM companies when both DRAM companies he started in China failed. Good luck with that in any reasonable court.

 

[chipsntexas]

There's quite a bit of naivete in some of these comments. Of course people take their knowledge and experience with them, that is their skill set.
But taking blueprints and (implied) process details and recipes is quite another thing. Even 20nm processes are quite valuable, and expensive, to develop.
Saving years of R&D and improving yields via this route is substantial, as not everyone has the multi-$BB budgets and time to do this.
Quite frankly, this is not a new thing and many companies consider it a cost of doing business with China - lose or give up proprietary information.
Or maybe I'm naive, and everything is done above board with no shenanigans...I could be wrong!

 

[Mooredaddy]

Insight: Indictment details plan to steal Samsung secrets for Foxconn China project

When former Samsung executive Choi Jinseog won a Foxconn contract, he tapped his former employer's supplier network to steal secrets to help his new client set up a chip factory in China, an indictment says.

www.reuters.com

The South Korean ‘master’ of chips accused of sharing secrets with China

Choi Jin-seok denies stealing Samsung technology. But the case underscores how the country is torn between geopolitical rivals

www.ft.com

For what it's worth 20nm is not considered leading edge and Chinese companies like CXMT have better DRAM technology than that. He also left Samsung in 2001 and SK Hynix in 2010. So I don't know what kind of corporate secrets he is supposed to have.

Theft is theft….

 

[tooLongInEDA]

Exactly. He worked for several years in the solar cell business after leaving SK Hynix in 2010, and then he moved back into DRAM in China in 2015. Even people who sign confidentiality clauses typically have a time limit. And in his case he resigned from SK Hynix apparently. Probably got zero severance package. Sounds more to me like they are trying to make an example out of him.

It will also be hard to show that he caused to damages to these South Korean DRAM companies when both DRAM companies he started in China failed. Good luck with that in any reasonable court.

IP theft is still theft, regardless of whether the Chinese company succeeded.

And the fact that the Chinese companies failed is not necessarily a result of these individuals (correlation != causation). Equally, in failing it's possible they changed the market dynamics and cost Samsung profits. May be difficult to prove this far on, but doesn't mean it may not be true.

I think most professionals in this industry understand the difference between residual knowledge and personal expertise and deliberate IP theft. I wouldn't employ anyone who didn't. It's the sort of thing that can kill a startup.

Samsung is notoriously paranoid about IP theft and security. Perhaps with good reason.

 

[Daniel Nenni]

IP theft is still theft, regardless of whether the Chinese company succeeded.

Agreed. It does go to damages though. This is a complicated case, as are most semiconductor litigations.

 

[Jert]

From China perspective, it doesn't matter. Every bit of secret, even small, can help them to take short cut and catch up. So they are willing to pay good price for it.

Mr. Choi spent more than 5 years circling around in China but with no takers, until eventually taken up by the city of Chengdu. That's a good indicator that his secrets are not viewed as high value.

Chengdu has been desperate for years in trying to establish some semiconductor presence, especially after GF's supposedly big fab failed to materialize in the last minute (fab foundation and shell and a good portion of the clean rooms were all completed and ready. After 4 yrs sitting in the rain, the site is now being retrofitted as a foundry fab).

So they gave him some small money to try out with a development line but he was not able to deliver results bigger than expected. Nobody has since heard any more news from that fab.

So my guess is Mr. Choi is a carefully chosen target.

But as a side note, as bad as China being a shameless IP theft, Korea is at least just as bad if not even worse.

 

[timregan]

It doesnt matter whether leading edge or not.

What I dont get is what do Companies think happen when someone leave and go work elsewhere?

They go full "Men in Black" and wipe their memory.

Anyone who move is going to bring some knowledge with them , otherwise what was the point in hiring them?

If a chauffeur takes a new job, they retain their experience and ability to drive. They don't get to keep the car.

This story does highlight an ongoing problem with security for semiconductor technology. No matter how many embargoes and restrictions are put in place, process details, PDKs and runsets can easily be written to a thumb drive and stolen. Many files are unencrypted and can be run without licenses so there's little to stop them being taken.

 

[Barnsley]

If a chauffeur takes a new job, they retain their experience and ability to drive. They don't get to keep the car.

This story does highlight an ongoing problem with security for semiconductor technology. No matter how many embargoes and restrictions are put in place, process details, PDKs and runsets can easily be written to a thumb drive and stolen. Many files are unencrypted and can be run without licenses so there's little to stop them being taken.

Agreed with respect to the chauffeur analogy , however nothing to stop the driver from trying to build a car!

If companies still allow thumb drive usage I will.be staggered!

We have had ours disabled for years , cant even use for charging as a last resort!
It is auto NON-Compliance from the auditor if its found you have active USB ports.

We are not the designers , but the eagle eye we are under , if those generating the data dont police themselves as they do their suppliers , then I have nothing to say.

 

[timregan]

Agreed with respect to the chauffeur analogy , however nothing to stop the driver from trying to build a car!

If companies still allow thumb drive usage I will.be staggered!

We have had ours disabled for years , cant even use for charging as a last resort!
It is auto NON-Compliance from the auditor if its found you have active USB ports.

We are not the designers , but the eagle eye we are under , if those generating the data dont police themselves as they do their suppliers , then I have nothing to say.

Fine if they're going to join another team building a car and they're bound to take some knowledge from past positions. Different if they take research files and documentation which is implied in the charges. I guess we'll learn more as the case progresses.

You're right about the thumb drives of course, but I'm sure you get what I mean. Many of the files in chip design are unsecured in themselves, so it's down to companies to lock things up and cast the eagle eye. There's little to stop the databases being used elsewhere if someone does manage to get them out of the door.

 

[M. Y. Zuo]

It is pretty ironic considering most, if not all? of the chaebols trace their successes back to opaque methods of getting IP when they were much smaller.

They may have been doing it all above board or not…

 

[Paul2]

opaque methods of getting IP

They bought it.

Samsung's first cellular chip was an obsolete Qualcomm design.

Their DRAM was licensed from Intel, and Intel then later even invested into SMS DRAM business.

Flash was licensed from Toshiba I believe.

 

[M. Y. Zuo]

There’s a lot of allegations from japanese sources

They bought it.

Samsung's first cellular chip was an obsolete Qualcomm design.

Their DRAM was licensed from Intel, and Intel then later even invested into SMS DRAM business.

Flash was licensed from Toshiba I believe.

Well a lot of people say otherwise, at least off-the-cuff, particularly for the 1995-2010 time period. But it’s all second hand and third hand information once it reaches my ears so maybe not.