Chinese employee accused of stealing SK hynix chip technology for Huawei

An SK hynix employee works at a chip production facility. Captured from SK hynix’s newsroom

A Chinese national who worked for SK hynix is on trial for allegedly stealing key semiconductor technology from the Korean chipmaker for Chinese IT firm Huawei, the latest in a series of chip technology leaks to Chinese firms, according to the police, Tuesday.

The Gyeonggi Nambu Provincial Police said a woman in her 30s, a Chinese national, was sent to prosecutors last month on suspicion of violating the Act on Prevention of Divulgence and Protection of Industrial Technology.

The former SK hynix employee was hired by the company in 2013 and worked in the department responsible for analyzing defects in semiconductor designs. From 2020 to 2022, she was involved in consultations with business-to-business client in China, according to the police agency.

The Chinese national returned to Korea in June 2022, and moved to Chinese IT company Huawei the same month. Shortly before leaving the Korean company, she allegedly printed out more than 3,000 sheet of documents related to front-end semiconductor manufacturing technology.

Police suspect that the former employee printed out the documents and then carried them out in bags, but she has denied the allegation. The police had investigated the case after receiving a report from SK hynix and arrested her at the airport when she entered the country last month.

In response to the techn leak allegation, SK hynix said it is cooperating with the investigation.

“As soon as we realized that (the former employee) had printed the information, we reported it to the investigative agencies, and we are supporting the investigation of the suspect and monitoring the investigation,” an SK hynix spokesperson said.

Samsung Electronics, SK hynix and other Korean chip companies are continuously struggling with tech leaks to China, which could cause economic damage of up to trillions of won, despite their preventive efforts by strengthening security checks on employees.

In April, Samsung also faced a similar case when a former department head was accused of stealing its chip technology, establishing a local Chinese company and transferring chip equipment engineers to his own company.

The information that was leaked was related to concern atomic layer deposition (ALD) equipment used in DRAM manufacturing processes. ALD equipment is essential for advanced chip manufacturing as it enables precise and uniform deposition, but China has not yet been able to develop this equipment.

The number of overseas tech leaks has been steadily increasing. According to the National Police Agency, the number of related cases sent to trial from February to October last year was 21, a 75 percent increase from the previous year. This is the highest number since 2013. By type of technology leaked, the number of cases was the highest in the display industry with eight, followed by chips with three.

Industry officials said that surveillance and punishment for leaks of semiconductor technology should be strengthened.

“The leakage of semiconductor technology is a serious crime that involves the leakage of information on key national industries and that the government should strengthen its measures to impose stronger criminal penalties on those involved to prevent further leaks,” an official from the local IT industry said on condition of anonymity.