A former Samsung Electronics Director General who leaked semiconductor deposition equipment technology, a national core technology, to China was sentenced to six years in prison on appeal but will face a heavier punishment following a Supreme Court ruling. The lower court had found the charge of disclosing trade secrets overseas not guilty, but the Supreme Court also found this guilty.
The Supreme Court's Third Division (Presiding Justice Lee Suk-yeon) on the 15th of last month overturned the appellate ruling that sentenced a person surnamed Kim (58) to six years in prison on charges including violations of the Act on Prevention of Divulgence and Protection of Industrial Technology and the Unfair Competition Prevention Act, and remanded the case to the Seoul High Court.
Kim worked at Samsung Electronics from January 1994 to July 2015 and left as a Director General. Afterward, Kim went to China and worked at memory semiconductor corporations CXMT from July 2016 to November 2020 in Hefei Province. When moving to CXMT, Kim leaked national core technologies, including Samsung Electronics' 18-nanometer DRAM semiconductor process information.
Kim learned that no company in China had succeeded in developing deposition equipment, a key facility for manufacturing DRAM semiconductors, and established the semiconductor equipment firm "Xinkai" with investment from Chinese capital. Deposition is a process that coats a wafer with a thin film at the atomic or molecular level to impart properties that conduct or block electricity. Kim served as vice president at Xinkai. Kim gathered experts in each semiconductor field and instructed them to leak core technologies from their respective companies.
Former employees of the domestic semiconductor deposition equipment company Eugene Technology, following Kim's instructions, uploaded in September 2022 to a network-attached storage (NAS) server scanned files of printed semiconductor deposition equipment manufacturing and assembly drawings that they had leaked without authorization. This server was set up in Korea by Kim, a former Samsung Electronics employee, to develop semiconductor deposition equipment in China. In this process, in addition to Eugene Technology, technologies were leaked from two more companies.
In the first trial, Kim, a former Samsung Electronics employee, was sentenced to seven years in prison and a fine of 200 million won. The first trial court found Kim guilty of violating the Unfair Competition Prevention Act by using trade secrets for uploading the semiconductor deposition equipment technology to a NAS server and using it abroad among the charges applied. However, for the charges of overseas disclosure of trade secrets and disclosure of industrial technology for use abroad, the court ruled not guilty, saying they were included in the trade secret use offense that it found guilty.
In the second trial, Kim's sentence was reduced to six years in prison and a fine of 200 million won. The appellate court said, "After being dismissed from the company where Kim worked, Kim tried to find a new job in Korea but, when that proved difficult, appears to have taken a job at a Chinese corporations to support the family's livelihood," adding, "This is on a different level in terms of illegality, culpability, and blameworthiness from collecting and leaking information as an industrial spy," explaining the reasons for sentencing.
The Supreme Court reached a different conclusion on final appeal. The court said, "If one passes (to a third party) trade secrets for the purpose of obtaining an unfair benefit or causing damage to the holder of the trade secrets, the crime of disclosing trade secrets can be established regardless of whether the trade secrets were actually used." The Supreme Court found that this aligns with the legislative purpose of the Unfair Competition Prevention Act.
The Supreme Court then found that the appellate court misunderstood the legal principles of the Unfair Competition Prevention Act. Accordingly, Kim will be retried on the charge of violating the Unfair Competition Prevention Act at the Seoul High Court. Kim's sentence is expected to increase from the previously imposed six years in prison.