Late last year, 10 former Samsung employees were indicated in a corporate espionage case in which they were accused of leaking critical chipmaking IP to China’s CXMT. Today, a South Korean court has found one of the accused guilty. The court sentenced 56-year-old “Jeon” to seven years in prison on charges of violating the region’s Industrial Technology Protection Act. The defendant purportedly stole over 600 detailed steps on DRAM manufacturing, according to Reuters.
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Estimates put Samsung’s R&D costs for 10nm DRAM at around 1.6 trillion KRW ($1.08 billion), spread across five years. Jeon left Samsung to work for CXMT around this time, and was thought to have shared chipmaking secrets via handwritten notes. CXMT was manufacturing 17nm DRAM in 2022 and jumped to 10nm in 2023 — a huge improvement for a fab with otherwise limited access to cutting-edge lithography tools.
The prosecution argued Samsung’s stolen IP contributed to CXMT’s abrupt growth. This alone would have been enough for an indictment, but the opportunity cost of lost sales (customers opting for CXMT over Samsung) was the final nail in the coffin. Moreover, Jeon received 2.9 billion KRW ($2 million) in exchange for the information he shared with the Chinese company, as well as stock options and other contract incentives.
Recently, HP was reported to be considering Chinese companies to supply memory amidst the growing component shortage. Asus and Dell are also interested in delegating some of their memory needs to China, since the major DRAM manufacturers are all laser-focused on making HBM for AI accelerators. CXMT is part of the “Section 1260H” list of foreign companies suspected of aiding the Chinese military, but it’s not banned in the U.S. yet.
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