Former Samsung employees arrested for allegedly leaking chip technology to China

Samsung

South Korean prosecutors have arrested 10 former employees of Samsung Electronics on charges related to the illegal transfer of sensitive semiconductor technology to a Chinese firm. The group is accused of leaking proprietary 10-nanometre DRAM technology to ChangXin Memory Technologies, widely known as CXMT, in violation of South Korea’s Industrial Technology Protection Act.

According to local media reports, investigators estimate that the alleged intellectual property theft has already contributed to a decline of nearly 5 trillion won in Samsung’s sales last year alone. Prosecutors also warned that the long-term damage to both the company and the national economy could run into several trillion won more if the technology continues to be exploited by competitors.

The arrested individuals reportedly include a former senior executive and several key research and development staff who were directly involved in Samsung’s DRAM development programmes. At the time CXMT was founded in 2016, Samsung was the only company globally capable of mass-producing 10-nanometre DRAM chips, giving it a significant technological lead over rivals. Investigators believe CXMT deliberately targeted this advantage by aggressively recruiting experienced Samsung engineers.

Authorities claim the former employees provided CXMT with crucial know-how that significantly shortened the Chinese firm’s development timeline. As a result, CXMT was able to produce China’s first domestically made 10-nanometre DRAM chip in 2023. Prosecutors further allege that the leaked information helped lay the foundation for CXMT to begin volume production of HBM2 high-bandwidth memory in 2024, bringing it into direct competition with established global suppliers.

One former Samsung executive, identified in reports only as “Mr A”, is said to have led CXMT’s work on 10-nanometre DRAM technology. Another engineer, “Mr B”, who had been involved in Samsung’s original research, allegedly copied sensitive manufacturing information. To avoid detection, he is accused of manually transcribing technical details rather than digitally copying files or photographing screens, a tactic designed to bypass Samsung’s strict internal security systems.

Market analysts cited in the investigation suggest CXMT is now aiming to capture as much as 15% of the global market for certain specialised memory products. Such a shift would place additional pressure on South Korean manufacturers, particularly Samsung, which has long been a market leader in advanced memory chips.

This is not an isolated incident. South Korea has seen a growing number of cases involving former semiconductor employees accused of leaking technology to Chinese companies. Earlier this year, a former employee of SK hynix was detained before boarding a flight to China, while another engineer was sentenced to 18 months in prison for attempting to sell chip-related information to Huawei. In 2024, two former Samsung executives were also arrested over allegations of using stolen trade secrets to help establish a chip factory in China.

Prosecutors say the latest case is particularly serious due to the number of people involved and the level of organisation. Investigators allege the group used shell companies to pass information, frequently changed office locations, and relied on encrypted communication channels. The suspects reportedly operated under the assumption that South Korea’s National Intelligence Service was monitoring their activities.

The case underscores growing concerns in South Korea about industrial espionage and the strategic importance of protecting semiconductor technology, which is widely seen as a cornerstone of the country’s economic and national security.