In 2018, South Korean authorities indict former Samsung executive Choi Jinseog for stealing secrets from his former employer’s supplier network to help Foxconn set up a chip facility in China.
On June 12, prosecutors announced the indictment, estimating that the crime cost Samsung Electronics (005930. KS) over $200 million to develop the stolen data. The announcement did not name Choi and provided few specifics, but some media identified him and his Foxconn ties.
Reuters saw Choi’s 18-page charge alleging he stole Samsung’s trade secrets and Foxconn’s plans.
Kim Pilsung, Choi’s counsel, disputed all charges.
According to the indictment, Jin Semiconductor, Choi’s Singapore-based consultancy, secured Foxconn’s contract in August 2018.
In months, prosecutors say Choi stole “a large number” of Samsung employees and secret chip plant knowledge from two contractors.
The indictment claims Jin Semiconductor improperly utilized sensitive semiconductor cleanroom management knowledge from Cho Young-sik, a Samoo Architects & Engineers contractor.
Clean factory rooms eliminate dust and other contaminants that can damage sensitive chips. Samoo built Samsung’s Xian chip facility in 2012.
Choi’s business also stole plans for Samsung’s China facility from HanmiGlobal employee Chung Chan-yup, who oversaw its construction and floor layouts of wastewater treatment and other chip manufacturing subsidiary facilities. According to the indictment, they have not determined how floor layout information was obtained.
Choi’s counsel vehemently denied the indictment.
The alleged theft has nothing to do with chip design or manufacture. “There are public international engineering standards for cleanrooms, not just Samsung’s,” Kim noted.
Factory layout? “You can take a snapshot from Google Maps and experts would know what is inside which building,” Kim added, exhibiting a satellite image of Samsung’s Xian, China plant.
Choi’s lawyer and someone familiar with the case said Foxconn’s withdrawal prevented the plant’s construction.
The world’s largest memory chipmaker, Samsung Electronics, rejected the comment, citing ongoing investigations.
Foxconn (2317. TW) said it was “aware of speculation around the legal case in South Korea” but didn’t comment on investigations.
“We abide by laws and regulations governing jurisdictions we operate in,” Foxconn added.
Foxconn is not charged. The indictment also cleared Samoo and HanmiGlobal.
Samoo denied prosecutors’ allegations to Reuters. Cho, the ex-employee, was not charged.
HanmiGlobal also denied involvement in the accusation. South Korean authorities charged Chung with disclosing business secrets. Chung’s lawyer did not reply to inquiries.
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