Former Samsung Electronics executives and others have been brought to trial on charges of leaking 10-nanometer-class DRAM national core technology to Chinese memory corporations ChangXin Memory Technologies (CXMT). With this leak, CXMT became the first in China to mass-produce 10-nanometer-class DRAM and laid the foundation for developing High Bandwidth Memory (HBM). Prosecutors estimate the damage from this case to be at least tens of trillions of won.
The Seoul Central District Prosecutors' Office's Information Technology Crime Investigation Division (Director General Kim Yoon-yong) said on the 23rd it had indicted and detained five core development personnel, including A, a former Samsung Electronics executive who served as CXMT's head of development, on charges of violating the Industrial Technology Protection Act (overseas leakage of national core technology), and indicted without detention five others, including part-by-part development heads.
◇ CXMT secures technology by recruiting Samsung Electronics personnel right after its founding
Samsung Electronics invested 1.6 trillion won in development costs and in 2016 began the world's first mass production of 10-nanometer-class DRAM. Since then, the three memory companies, including SK hynix and U.S. Micron, all succeeded in developing 10-nanometer-class DRAM. Currently, HBM is made by stacking 10-nanometer-class DRAM vertically.
CXMT is China's only DRAM manufacturer, founded in May 2016. Local Chinese governments invested 2.6 trillion won, and the central government also provided full support. The company succeeded in developing 10-nanometer-class (18-nanometer) DRAM in 2023.
Prosecutors found that right after its founding, CXMT drew up a plan to secure technology by intensively recruiting domestic personnel who had succeeded at the time in mass-producing 10-nanometer-class DRAM.
◇ Technology leaked in waves from Samsung Electronics alumni, first and second groups… also secured SK hynix technology
Samsung Electronics' core 10-nanometer-class DRAM technology was leaked in two waves, the first and the second development teams.
Two people, including B, the first head of development and a former Samsung Electronics Director General, illegally obtained Samsung Electronics' trade-secret 18-nanometer DRAM process information and used it for CXMT's DRAM development. In this process, former Samsung Electronics researcher C was found to have moved to CXMT in Sept. 2016 and leaked the "hundreds of steps of 10-nanometer-class DRAM process technology" by hand-copying it. Prosecutors said, "Through this, CXMT effectively secured in its entirety the then world-unique 10-nanometer-class DRAM process technology."
A and others joined a CXMT shell company and were found to have moved meticulously to evade investigation, such as transiting through nearby cities when entering China. It was revealed they even set a code (♥♥♥♥, four hearts) in preparation for situations such as an exit ban or arrest by the Korean government.
After securing process information, CXMT recruited A, a former Samsung Electronics executive, as the second head of development. From Feb. 2018 to early 2023, A led DRAM development by modifying the process information to fit Chinese equipment.
In the process, CXMT was found to have additionally secured SK hynix's national core technology. Prosecutors believe the company requested technology provision through a partner that supplied semiconductor equipment to SK hynix.
◇ CXMT's global DRAM market share estimated at 7% this year
CXMT's share of the global DRAM market was less than 1% in early 2024, but this year it is estimated to reach about 7% annually. Prosecutors said that as a result, Samsung Electronics' 2024 sales fell by about 5 trillion won, and that the cumulative damage going forward will reach at least tens of trillions of won.
Prosecutors picked up a lead in Jan. last year and launched an investigation. Following searches and analysis, they confirmed that the match rate between CXMT materials and Samsung Electronics materials rose from an initial 56.7% to 98.2%. Prosecutors indicted and detained the second head of development, a Head of Team, and a principal researcher on Oct. 2, and this month indicted without detention five part-by-part heads.
A prosecution official said, "Through direct investigation, we established not only that national core technology was leaked but also that the leaked technology was used throughout the entire process up to the final mass-production stage," adding, "We will continue to respond sternly to crimes involving the overseas leakage of national core technology that directly affect the national economy and technology security."