Samsung Chip Technology Leak to China: 10 Former Employees Arrested, South Korea Faces Trillion-Won Losses

In a major blow to South Korea’s semiconductor industry, ten former Samsung employees have been arrested for allegedly leaking highly sensitive chip-making technology to a Chinese company. The stolen technology, considered a core national asset, is estimated to have caused losses worth trillions of won to Samsung and could inflict long-term damage on South Korea’s economy.

Secret Technology Sold to Chinese Firm

According to reports, the accused individuals passed on Samsung’s 10-nanometer DRAM chip manufacturing technology to Chinese memory maker ChangXin Memory Technologies (CXMT). This technology was Samsung’s proprietary intellectual property and a key factor behind its global leadership in advanced memory chips.

All ten accused had previously worked in research and development roles at Samsung, giving them access to confidential technical data. Investigators claim that the leak alone caused Samsung losses of nearly 5 trillion won last year, with further economic damage expected in the coming years. (Won is South Korea’s national currency.)

How China Gained an Edge

As reported by The Times of India, CXMT was founded in 2016, at a time when Samsung was the only company in the world mass-producing 10nm DRAM chips. Soon after its formation, CXMT allegedly lured key Samsung personnel with lucrative job offers.

Investigations revealed that these former employees secretly transferred confidential data, enabling CXMT to rapidly close the technology gap with Korean firms. To avoid detection, they reportedly operated through shell companies, frequently changed locations, and used covert communication methods.

Major Gains for CXMT

The stolen technology played a critical role in CXMT’s rapid progress. In 2023, the company successfully produced China’s first 10nm DRAM chip. By 2024, it had begun large-scale production of HBM2 (High Bandwidth Memory) chips, a crucial component for AI and high-performance computing.

Market analysts say CXMT is now targeting 15% of the global HBM memory market, posing direct competition to industry leaders like Samsung and SK Hynix.

How the Data Was Stolen

Due to strict security measures at semiconductor firms, copying files or taking photos was nearly impossible. Investigators revealed a shocking detail: one former employee hand-copied 12 pages of critical technical information to bypass digital surveillance.

The group allegedly used code language to communicate and believed they were under constant surveillance by intelligence agencies, further highlighting the seriousness of the espionage operation.

Not an Isolated Case

This is not the first time South Korean tech professionals have been accused of leaking sensitive information to Chinese firms. Earlier this year, a former employee was arrested at an airport while attempting to travel to China with confidential data. Another engineer was sentenced to 18 months in prison for trying to sell trade secrets to Huawei.

In 2024, two former Samsung executives were also arrested for allegedly stealing confidential information to help build a chip manufacturing facility in China.

A National Security Concern

The case underscores growing concerns over industrial espionage in the global semiconductor race. For South Korea, semiconductors are not just a business—they are a strategic pillar of national security and economic strength.

Authorities have vowed stricter action to prevent future leaks, as the battle for dominance in advanced chip technology continues to intensify worldwide.