Korean semiconductor firms face talent poaching as China intensifies recruitment efforts

“A day hasn't passed since the press release of the newly developed technology, and offers for recruitment have already come to key engineers. I think the situation has become serious. It is getting increasingly difficult to retain key personnel.”

According to the industry on the 21st, the recruitment offensive by Chinese semiconductor corporations against key personnel at domestic semiconductor companies is intensifying. Concerns are rising that the targets for recruitment have expanded not only to large memory semiconductor companies such as Samsung Electronics and SK hynix but also to emerging artificial intelligence (AI) semiconductor companies and semiconductor equipment manufacturers.

An executive at a domestic semiconductor equipment company noted, “Recently, there has been a growing caution regarding new technology development and announcements, and a higher level of management is needed for employee security and personnel leakage.” He mentioned a recent case, saying, “It seems that a lot of internal information has already been leaked externally, as offers for recruitment have come to key personnel less than a day after the technology was announced.”

In the memory semiconductor field, where China is investing significant effort, attempts to poach talent stand out the most. Recently, Chendu Gaozhen (CHJS) representative Choi (67) and process design director Oh (61) are being tried for allegedly misusing national core technology that Samsung Electronics developed with an investment of 4 trillion won. Additionally, brokers who facilitated Chinese job changes for key personnel in Samsung Electronics’ semiconductor processes have been handed over to prosecutors, with reported damage amounts reaching 4.3 trillion won.

On the 19th, the Suwon District Prosecutor’s Office’s Defense Industry and Industrial Technology Crime Investigation Division announced that it has arrested and charged two individuals, A (55) and design team leader B (43), for violating the Industrial Technology Protection Act and the Unfair Competition Prevention and Trade Secret Protection Act (leakage of trade secrets abroad). Three corporations, including the company operated by person A, and nine related persons, including company employees, were also charged without detention for the same charges.

Person A, president of the domestic subsidiary of China’s largest semiconductor equipment company, is accused of conspiring with person B to misuse design documents for cleaning equipment chambers and transport robot blueprints from Semes, a semiconductor equipment manufacturer and a subsidiary of Samsung Electronics, from October 2021 to April 2024. He is also accused of creating documents using Samsung Electronics' cleaning process recipe (a document detailing the procedures and methods used to operate cleaning equipment).

As Chinese semiconductor companies accelerate their talent acquisition efforts, Samsung Electronics and SK hynix are formulating strategies such as reorganizing performance-based compensation systems to protect their 'homegrown talent.' They are also strengthening company regulations to prevent leakage of technology through resignations or former executives. There is an increased focus on employment restriction pledges and monitoring for former employees.

However, while large corporations consider alternatives, such as applying excess profit stock compensation systems to regular employees, smaller corporations find themselves at a disadvantage. Companies in fields such as fabless (semiconductor design), intellectual property (IP), and testing have limited means to retain key personnel.

As corporations find it increasingly difficult to prevent technology leaks overseas independently, there are calls for government assistance. An official from the Korean Semiconductor Industry Association remarked, “The biggest issue is that the laws and standards related to industrial espionage and technology leakage are lax,” adding that “strong regulatory measures are necessary to prevent further national losses, given that a significant portion of core technology has already leaked.”