Former Samsung executive accused of stealing chip secrets to help Foxconn

An ex-Samsung employee, who was accused of stealing trade secrets, was reportedly planning to help Foxconn. A couple of weeks back, the former Samsung Electronics employee was indicted on charges of not only stealing chip secrets but also leaking them to a rival Chinese company.

According to recently surfaced information, South Korean prosecutors suggest that a former Samsung executive was sparing no effort to help Foxconn set up a chip factory in its home country. Now, a new report by Reuters has revealed that the ex-Samsung exec is Choi Jinseog.

Choi Jinseog accused of stealing Samsung's chip secrets

The indictment, which was announced on June 12, implies the theft caused over a whopping $200 million (about £156,235,000) in damages to the Korean smartphone giant. Reportedly, this is the estimated cost Samsung spent on the data that was stolen.

While the announcement did not directly name Choi and divulged only limited details, some media outlets identified Choi and his links to the Chinese electronics industry company, Foxconn. More details about the case against Choi have been mentioned in an unreleased 18-page indictment, which highlights how he is accused of stealing trade secrets from Samsung.

Aside from this, the indictment comprises details about the upcoming Foxconn plant. However, Choi denied the aforesaid charges through his lawyer Kim Pilsung. He has been detained in jail since May. Foxconn and Choi Jinseog's consultancy firm, Jin Semiconductor teamed up to build a new chip factory in 2018.

Choi allegedly stole details about Samsung's supplier network, as well as trade secrets. A report by SamMobile suggests Choi poached "a large number" of employees from Samsung and its affiliates to illegally acquire information. Meanwhile, some Samsung employees are reportedly busy expressing their displeasure with the design of Samsung's upcoming Galaxy Z Fold 5.

Notably, prosecutors claim Choi got in touch with two contractors to obtain secret information regarding building a chip factory. Choi acquired confidential information on semiconductor cleanroom management with the help of Cho Young-sik, who worked at Samsung's subsidiary Samoo Architects & Engineers. In 2012, Samsung collaborated with Samoo to build its plant in Xian, China.

To those unaware, cleanrooms are enclosed areas where companies manufacture chips. Furthermore, cleanrooms are dust-free and do not have any other impurities.

Meanwhile, Chung Chan-yup, who is an employee at HanmiGlobal helped Choi acquire blueprints of the factory. It is worth noting that HanmiGlobal supervised the construction of Samsung's Xian-based chip plant.

While the indictment alleges the secret information Choi illegally obtained from Samsung was meant to help Foxconn build a new chip factory in China, Choi's lawyer says the factory was never built. In fact, Choi's lawyer claims the allegedly stolen information doesn't reveal "how to design or make chips."

Moreover, Samsung is not the only company that has access to public international engineering standards that come in handy for making cleanrooms. The lawyer also pointed out that anyone can take snapshots from Google Maps of a factory layout. These snapshots are enough to help experts to figure out what is inside which building.

Foxconn, Samoo, HanmiGlobal haven't been accused of any wrongdoing

The indictment doesn't imply Foxconn, Samoo, and HanmiGlobal are involved in any wrongdoing. While Samoo's former employee Cho Young-sik wasn't charged, HanmiGlobal's Chung Chan-yup has been charged with illegally sharing business secrets.

Overall, South Korean lawmakers have indicted seven individuals in this case. Apart from Chung Chan-yup and Choi Jinseog, five more people who are former and current employees of Jin Semiconductor have been charged.

All of the companies claim they have no involvement. "We abide by laws and regulations governing jurisdictions we operate in," Foxconn said. A trial of the case is slated to begin on July 12. Samsung is understandably mum on the matter amid the ongoing investigations.

Jinseog was a high-profile name in the South Korean chip market before this controversy. The 65-year-old executive worked with Samsung for nearly twenty years before leaving the company in 2001. He then worked with SK Hynix as a CTO for more than eight years. Choi developed DRAM memory chips at Samsung.

In the meantime, Samsung is gearing up to unveil a slew of new products at its next Unpacked event which is expected to take place in July. It will be interesting to see whether the ongoing case will affect Samsung's plan to unveil new products including the Galaxy Z Fold 5 and Z Flip 5 at the impending event.