A former Samsung Electronics (005930.KS) researcher accused of leaking core semiconductor technology to a Chinese competitor was sentenced to seven years in prison in a first-instance ruling.
The 28th Criminal Division of the Seoul Central District Court, presided over by Chief Judge Han Dae-gyun, on Monday sentenced a former Samsung Electronics employee surnamed Jeon to seven years in prison on charges of violating the Act on Prevention of Divulgence and Protection of Industrial Technology, including the overseas leakage of national core technology.
Jeon is accused of unlawfully acquiring and using Samsung Electronics' DRAM process national core technology, which cost 1.6 trillion won ($1.2 billion) to develop, after moving to Chinese DRAM chipmaker ChangXin Memory Technologies (CXMT). CXMT is China's first DRAM semiconductor company, established with a 2.6 trillion won ($1.9 billion) investment from a Chinese local government.
Prosecutors determined that Jeon established a "CXMT DRAM semiconductor development plan" in the process of moving to CXMT, securing Samsung Electronics' DRAM chip process technology and recruiting key personnel. Jeon received approximately 2.9 billion won ($2.1 million) from CXMT over about six years, including a 300 million won sign-on bonus and 300 million won in stock options.
The court determined that the core semiconductor process technology leaked to the Chinese company, including the Process Recipe Plan (PRP), falls under national core technology. It also found that Jeon conspired to leak Samsung Electronics' core technology.
"He acquired core information developed by a major Korean company at enormous cost and had it used by a foreign entity," the court said. "Because this inflicted losses not only on the company but also on the Republic of Korea, severe punishment is unavoidable."
Previously, another defendant surnamed Kim, who was indicted on charges of leaking core process-related technical data when moving to CXMT in 2016, was sentenced to six years in prison and a 200 million won fine in a second-instance ruling. The case was remanded by the Supreme Court and is currently being reviewed by the Seoul High Court. The Supreme Court sent the case back, ruling that the lower court had failed to independently assess the "acquisition," "use," and "third-party disclosure" of trade secrets under the Unfair Competition Prevention Act. The lower court had determined that the act of "disclosure" between accomplices sharing trade secrets was included in the act of "use," but the Supreme Court held that these should be viewed as separate crimes.
