Ex-Samsung employees arrested for selling trade secrets to Chinese company

Two former Samsung employees have been arrested for selling trade secrets to Chinese memory manufacturer CXMT. The suspects are said to have made tens of millions of dollars from it, while Samsung suffered damage worth 1.8 billion dollars.

According to South Korean prosecutors, the ex-employees passed on information about Samsung’s 16nm dram production process to China’s ChangXin Memory Technologies. writes KED Global on the authority of those involved. As a result, Samsung is said to have suffered damages worth 1.8 billion dollars, although it is not clear what the prosecutors’ claim is based on. According to the sources, the plaintiffs allege that Samsung was able to maintain a significantly smaller lead over its Chinese competitor; it usually takes years to develop such a production process.

One of the suspects is said to have had a management position at Samsung before quitting in 2016 and going to CXMT with the trade secrets. There, according to the medium, he received a salary of ‘millions of dollars per year’. Little is known about the second suspect, except that he was a subcontractor. The two suspects were arrested in South Korea on December 15 after returning from China in October this year. The South Korean secret service National Intelligence Service already reported the incident in May this year.

Last week published Reuters a statement from the memory manufacturer; CXMT says it respects intellectual property and says it has security mechanisms to prevent information from third parties. According to the news service, the company has not responded substantively to the allegations. As far as we know, only the two former Samsung employees will be prosecuted and there will be no consequences for CXMT.

Source: Samsung