Seoul court sentences ex-Samsung engineer to five years for leaking chip data

Seoul High Court judges sentenced a former Samsung Electronics employee to five years in prison on Oct. 22 for leaking company technology to ChangXin Memory Technologies. The verdict reduced the seven-year term imposed during his initial trial in April. The engineer joined the Chinese firm in 2016. This outcome signals a shift in how South Korean courts handle disputes over semiconductor intellectual property.

The ruling highlights the intensifying competition for engineering talent as Chinese manufacturers narrow the technological gap with established players. Samsung is not new to these legal battles. In 2023, a court blocked a former Samsung DRAM researcher from joining Micron, a U.S. rival, by upholding a two-year non-compete clause. Judges determined the restriction was necessary to protect the company's business information.

Ten years ago, Samsung primarily tracked engineers moving to competitors like SK Hynix or Micron. A former employee who requested anonymity said the company built two-year non-competes into contracts for senior staff. This strategy aimed to deter departures by showing that moving to a rival carried real consequences.

Chinese firms have aggressively recruited experienced overseas engineers with high salaries, stock options, and housing benefits, according to Jeongku Choi, a senior analyst at Counterpoint Research. This influx of expertise helped Chinese chipmakers overcome bottlenecks created by U.S. export restrictions on advanced equipment. Choi described Chinese manufacturers as meaningful competitors. Counterpoint projects that ChangXin Memory Technologies will hold 10% of global DRAM revenue by the end of the second quarter of 2026.

In response, established chipmakers are strengthening internal security and adjusting compensation to retain key staff. South Korea has designated certain manufacturing technologies as National Core Technologies, which raises penalties for unauthorized leaks. Choi expects trade secret management to expand into intellectual property and legal areas as Chinese firms increase exports.

Legal experts note that protecting this knowledge varies by jurisdiction. Jamie J. Yang, a partner at Innovatus Law in Taiwan, said non-compete agreements there are limited to two years and require employers to pay at least half the employee's average monthly salary during that period. She added that the complexity of manufacturing makes it rare for one person to replicate an entire production line elsewhere.

Zechariah Chan, a partner at Lee & Lee in Singapore, noted that proving a competitor used proprietary intangible techniques is difficult. He stated that general skills belong to the engineer, while trade secrets remain with the company. Courts in Singapore and Hong Kong enforce non-competes only when they are reasonable in scope and duration. Neither Samsung nor ChangXin Memory Technologies responded to requests for comment.