When former Samsung government Choi Jinseog gained a contract with Taiwan’s Foxconn in 2018, he tapped his former employer’s provider community to steal secrets and techniques to assist his new shopper arrange a chip manufacturing unit in China, an indictment by South Korean prosecutors alleges.
Prosecutors introduced the indictment on June 12, saying the theft triggered greater than $200 million (roughly Rs. 16.3 crore) in damages to Samsung Electronics, based mostly on the estimated prices Samsung spent to develop the stolen information. The announcement didn’t identify Choi and gave solely restricted particulars, though some media subsequently recognized Choi and his hyperlinks with Foxconn.
The unreleased 18-page indictment, reviewed by Reuters, supplies particulars within the case towards Choi, together with how he’s alleged to have stolen Samsung’s commerce secrets and techniques and particulars in regards to the deliberate Foxconn plant.
Choi, who has been detained in jail since late May, denied all the costs by means of his lawyer, Kim Pilsung.
Choi’s Singapore-based consultancy Jin Semiconductor gained the contract with Foxconn round August 2018, in line with the indictment.
Within months, Choi had poached “a large number” of staff from Samsung and its associates and illegally obtained secret data associated to constructing a chip manufacturing unit from two contractors, prosecutors allege.
Jin Semiconductor illegally used confidential data involving semiconductor cleanroom administration obtained from Cho Young-sik who labored at one of many contractors, Samoo Architects & Engineers, the indictment alleges.
Clean rooms are manufacturing amenities the place the enclosed atmosphere is engineered to take away mud and different particles that may harm extremely delicate chips. Samoo participated within the 2012 development of Samsung’s chip plant in Xian, China.
Prosecutors allege Choi’s firm additionally illegally obtained blueprints of Samsung’s China plant from Chung Chan-yup, an worker at HanmiGlobal, which supervised its development and flooring layouts of wastewater remedy and different subsidiary amenities involving the chip manufacturing course of. They have but to ascertain how the knowledge on flooring structure was obtained, in line with the indictment.
Choi’s lawyer strenuously rejected the claims offered within the indictment.
“What prosecutors allege was stolen has nothing to do with how to design or make chips. For instance, there are public international engineering standards to make cleanrooms and that’s not something only Samsung has,” stated Kim.
“A factory layout? You can take a snapshot from Google Maps and experts would know what is inside which building,” Kim stated, displaying a satellite tv for pc snapshot of Samsung’s plant in Xian, China.
The plant was by no means constructed after Foxconn pulled out, in line with Choi’s lawyer and an individual with direct data of the case.
Samsung Electronics, the world’s largest reminiscence chipmaker, declined to touch upon the matter, citing the continued investigations.
In a press release, Foxconn stated that whereas it was “aware of speculation around the legal case in South Korea”, the corporate would not touch upon ongoing investigations.
“We abide by laws and regulations governing jurisdictions we operate in,” Foxconn stated.
The indictment doesn’t accuse Foxconn of wrongdoing.
Samoo and HanmiGlobal weren’t accused of any wrongdoing within the indictment both.
Samoo advised Reuters it was not concerned in any alleged actions laid out by prosecutors. Its former worker Cho was not charged, and couldn’t instantly be reached for remark.
HanmiGlobal additionally stated the allegation was linked to a person and the agency had no involvement. Its worker Chung has been charged by South Korean prosecutors with leaking enterprise secrets and techniques. A lawyer for Chung didn’t instantly reply to requests for remark.
TRADE SECRETS
Samsung treats the sorts of supplies Choi obtained as “strictly confidential” and safeguards them by means of a number of layers of protections, permitting entry solely to those that have authorisation throughout the agency and at its third-party companions, the indictment says.
The 65-year-old Choi was as soon as seen as a star in South Korea’s chip business. He labored at Samsung for 17 years, the place he developed DRAM reminiscence chips and labored on wafer processing know-how, successful inner awards for advancing the corporate’s DRAM know-how, earlier than leaving in 2001.
He subsequently labored at rival Hynix Semiconductor, now often called SK Hynix, for greater than eight years, serving as chief know-how officer of its manufacturing and analysis divisions and serving to flip across the loss-making chipmaker.
According to the indictment, the brand new Foxconn plant had a deliberate capability of 100,000 wafers per 30 days utilizing 20-nanometre DRAM reminiscence chip know-how. While years behind Samsung’s newest 12- and 14-nanometre know-how, 20-nanometre DRAM continues to be thought-about a “national core technology” by South Korea.
The South Korean authorities prohibits such applied sciences from being transferred abroad except by means of legally permitted licensing or partnership.
Lee Jong-hwan, a chip engineering professor at Sangmyung University, stated data to make optimum circumstances for cleanrooms and manufacturing unit structure was vital to reaching excessive yield charges for chips, which might have helped China’s home chipmaking capabilities.
Lee famous that some information obtained by Choi would possibly end up to not be delicate, “But now that China is keen to catch up with South Korean companies… any data related to 10-nanometre, 20-nanometre technology would have been helpful.”
CHINA LINK
Choi signed a preliminary consulting contract in round 2018 with Foxconn to construct the chip manufacturing unit probably in Xian, his lawyer stated.
However, Foxconn ended the contract only a yr later and solely paid salaries associated to the undertaking, the lawyer stated. He declined to touch upon why Foxconn ended the contract or to supply additional particulars, citing the sensitivity of the matter.
The particular person with direct data of the case stated prosecutors discovered Foxconn had agreed to supply 8 trillion gained ($6 billion) to construct the manufacturing unit, and Foxconn additionally paid a number of million {dollars} to Choi’s firm each month till it pulled out of the contract for causes the indictment didn’t disclose.
Jin Semiconductor’s monetary assertion in 2018 stated it entered into an association with “a major customer” for the availability of certified manpower within the subsequent 5 years. The buyer paid an advance of $17,994,217 (roughly Rs. 147.4 crore) to the corporate, in line with the assertion.
Foxconn, formally referred to as Hon Hai Precision Industry, didn’t reply questions put to it by Reuters on any funds to or agreements with Jin Semiconductor or Choi.
Choi’s lawyer stated his shopper could also be a scapegoat in a marketing campaign by the South Korean authorities, caught in a rivalry between China and the United States, in search of to hunt to gradual China’s progress in chip manufacturing.
South Korean President Yoon Suk Yeol this month declared chip business competitors an “all-out war”.
“This might be setting an example for the current administration’s agenda, such as technology leaks to China,” Pilsung, Choi’s lawyer stated.
A prosecution official declined to touch upon the suggestion Choi was a scapegoat.
Choi is charged together with 5 different former and present Jin Semiconductor staff and a Samsung contractor worker. The trial is ready to start on July 12, court docket data present.
© Thomson Reuters 2023
