Researchers, headhunters and spies: China’s pursuit of Korean chip talent puts 80 scholars under intelligence agency watch

Korea's national intelligence agency is monitoring about 80 leading Korean scholars targeted for recruitment by the Chinese government, in an effort to stop advanced technology from leaking abroad, industry and academic sources said Tuesday.

"I heard that professors in the semiconductor field make up the largest share of those targeted, and that professors in other fields such as batteries are also included," said a professor who asked not to be named. "The National Intelligence Service has been advising them to be careful about recruitment offers from the Chinese side."

China has long drawn in scientists and technology experts through programs, namely the Thousand Talents Plan, launched in 2008 to lure overseas talent by offering research funding and settlement allowances.

Korean academics say offers from China are an everyday occurrence.

"Recruitment emails come in about once a week from different parts of China, including Zhejiang," said Lee Byoung-hun, a professor of semiconductor engineering at Postech who worked on chip research and development at Samsung Electronics and IBM. "They offer an annual salary of 300 million won ($221,200), a performance bonus equal to the salary, about 1 billion won a year in research funding and even a house and a car."

"Apart from illegal leaks, China's policy of treating scientists well cannot help but be compared to the research environment here," Lee added. "They put forward compensation packages that could easily tempt academics."

Their targets reach far and wide at Korean companies, regardless of their role — so much so that anyone whose profile on LinkedIn lists experience at Samsung Electronics or SK hynix draws a flood of contacts from Chinese companies and headhunters.

"It is not just engineers but marketing and sales staff as well," an official in the Korean chip industry said. "Each role has experience or information that [Chinese companies] need."

Headhunters especially target people around the time they retire. They offer high pay to those who struggle to find new jobs in Korea.

"Executives are most psychologically vulnerable right after they retire," said a former Samsung Electronics executive who was stationed in China. "When a chip downturn pushes more executives out of the company, that is when Chinese headhunters make contact."

What Chinese companies want to buy is the process know-how that Korean companies have built up over decades. Even with identical equipment, yields vary widely depending on how skillfully a company fine-tunes each step of the process and tracks down the causes of defects.

"Technology is the result of countless rounds of trial and error that take money, time and people," said Lee Byung-chul, a former executive vice president at Samsung Electronics. "For China, bringing in key talent lets it skip that process, so it is a profitable deal even if it pays them a salary several fold over that they’d make in Korea."

Engineers who are recruited can, in turn, become bait for other Korean workers. Once they have handed over their technology and experience, their standing at the Chinese company can shrink. Some then reportedly turn into recruitment brokers and earn a living by introducing former colleagues to Chinese companies for a fee.

Moving to a foreign company does not necessarily entail a technology leak. The problem is when trade secrets or core technology are taken and used without authorization.

"Looking at the cases [that went to trial], many people did not simply leave with experience in their heads," Kang Ki-joong, head of a Korean industrial security association and a former Patent Court judge, said. "They downloaded, copied or separately organized materials and took them. Something is not exempt from being a trade secret just because it was recalled from memory. For instance, pieces of information may each be public, but the whole, once combined, can be considered information that must not be disclosed."

Police caught 179 technology leaks last year, 33 of them involving leaks overseas, Korean National Police Agency data shows. China was the destination in 18 of those, or 54.5 percent.

Companies are trying to keep materials from walking out the door through entry searches, blocks on phone cameras, document classification and controls on external transmissions. They have departing employees sign confidentiality pledges and have key personnel sign noncompete agreements.

Experts stress, however, that prevention through tighter security matters most, since damage is hard to undo once technology has leaked.

"Companies should train employees more thoroughly and step up follow-up management of key technical personnel who have retired," Samsung Electronics' former executive vice president Lee said.

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