A group of former employees of South Korean technology giant Samsung have been arrested on charges of leaking the company’s critical 10-nanometer class DRAM memory technology to Chinese manufacturer ChangXin Memory Technologies (CXMT).
Memory Sector Spy Scandal
The investigation, conducted by the Seoul Central District Prosecutor’s Office, has resulted in charges against a total of 10 people, including former Samsung executives. Five of these individuals have been sent to prison, while the remaining five are being tried without detention.
Investigations reveal that the leaked trade secrets caused Samsung approximately $3.46 billion in direct damages, and the total loss to the South Korean economy amounts to tens of trillions of won.
The events date back to 2016, when CXMT was founded. During its establishment, the company appointed a former Samsung department manager to head its development unit. This manager, along with other former Samsung researchers, allegedly obtained confidential data related to 18nm DRAM manufacturing processes through another Samsung employee.
The leaked technical data was illegally used in the Chinese company’s DRAM development activities. Prosecutors documented that an employee who leaked the data manually copied hundreds of steps in the production process and passed them on to the Chinese team.
It appears the suspects employed highly professional methods to avoid detection. The former Samsung executive established a shell company that constantly changed addresses to conceal their tracks, and team members developed an encrypted communication language to avoid potential surveillance.
As a result of these activities, conducted between 2018 and 2023, Samsung’s proprietary technology was integrated into production equipment in China, enabling CXMT to transition to 10nm class memory production by 2023.
