Ex-Samsung manager's apology for leaking tech to CXMT highlights tragedy of chip engineers' Chinese dreams

A former Samsung Electronics senior manager convicted of leaking the company's 18-nanometer dynamic random-access memory (DRAM) technology to China's ChangXin Memory Technologies (CXMT) has apologized to Samsung for the first time.

"I am sorry to Samsung Electronics, and I want to sincerely apologize," the former manager, surnamed Jeon, told his appeals trial on Sept. 9.

A local court sentenced Jeon to seven years in prison for leaking and using the national core technology. He denied the charges through his first trial but changed his position on appeal.

"Samsung Electronics is the biggest victim of this case," Jeon wrote in a letter of remorse submitted to the court. "I thought that confessing honestly would also help prevent this from happening again."

Samsung was Jeon's workplace for 28 years. After graduating from a provincial technical high school, he joined the company in 1987 and worked on estimating equipment investment costs for its chip plants.

Jeon was reportedly proud to work for Samsung. He once brought an American engineer he worked with back to his hometown for a meal, and word went around the community that "the Jeon boy even talks with the Yankees."

He left Samsung in 2015.

"When the memory business turned sour at the time, people left the company, and many of them went to Chinese companies," a semiconductor industry source said.

CXMT lured them with generous pay.

Jeon moved to Hefei, China, to manage equipment investments after receiving an offer from a person surnamed Ju, who was an interpreter for CXMT's chief technology officer. Other former Samsung engineers followed. They were offered at least twice their previous after-tax salaries, and some were reportedly guaranteed up to 3 billion won ($2.2 million).

Jeon said the first 18-nanometer DRAM process recipe CXMT drew up was far from complete. Known as a process recipe plan (PRP), it sets out which equipment is used to make a chip and in what order and under what conditions.

That changed after a process architecture engineer surnamed Park, who had worked on Samsung's 18-nanometer DRAM process, joined the company. Investigators found that Park had copied process information by hand into a notebook before leaving Samsung. After Park joined, CXMT's PRP, which runs to 615 steps, came together quickly, and its sequence barely changed afterward.

In 2018, CXMT committed to a 1.5 trillion won "one-pass" investment, in which a chipmaker orders and installs all the equipment needed for its target production capacity at once.

"A one-pass investment cannot be made unless the PRP is certain to succeed," Jeon testified. "I was 100 percent sure it was Samsung's PRP."

The technology theft was done covertly. CXMT executives referred to Samsung by the code name "Yellow Mountain" to maintain secrecy. Some Korean employees were hired under the name of a fertilizer company that CXMT had set up or traveled to Hefei via other cities.

The scheme unraveled in 2022. The head of CXMT's first development team, surnamed Kim, was caught up in a separate case over the leak of a Korean company's semiconductor deposition equipment technology. Investigators searching a server found a PowerPoint file titled "reference photos" that contained photos of Samsung's 18-nanometer DRAM PRP, and the investigation accelerated.

After Kim was arrested, Park, who was in China, reportedly complained to Jeon about the development head. "It seems the paper printouts are the problem," Park said. "I told them not to take photos, but they did."

Park later disappeared and remains at large, presumably in China. Ten people, including Jeon and the head of CXMT's second development team, surnamed Yang, were arrested and indicted.

Most of the other defendants maintain that they did not know the PRP had been brought in illegally. They argue that former Samsung engineers developed the process by pooling their own experience and memories.

"Korean employees went out drinking together all the time and talked about even the most trivial things on messenger apps, but there was never any direct conversation or rumor about stealing the PRP," a lawyer for one of the defendants said.

Things did not end well for those who chased the big payday. Many Korean engineers who moved to Chinese chipmakers for high salaries were pushed out within three to four years, industry officials say. By then, the core technology had been transferred and the factories built. Since returning home, some remain out of work because ongoing investigations have prevented them from reentering the industry, while others stand trial without telling even their families.

"What awaits those who leak technology is to be thrown away once they are no longer useful, followed by endless investigations and trials," said Kim Seo-gon, a former National Intelligence Service official who is now an adviser at law firm Lee & Ko.

"It can ruin not only companies and the country but also the lives of those involved, so people must not give in to a moment of temptation."

BY KIM SU-MIN, LEE YOUNG-KEUN [[email protected]]