Chinese Caught Trying To Steal Samsung Display Secrets, Court Reveals
Samsung secrets and attempts by Chinese display companies to steal Korean display technology is being played out in a South Korean Court this week.
On trial are two key Samsung executives were caught allegedly leaking information on Samsung display technology to a display machine manufacturer making products for a major Chinese display Company.
The arrests came after an investigation by South Korea’s National Intelligence Service who exposed attempts by a large Chinese display manufacturer to steal Samsung proprietary OLED information according to the Korean Herald.
Dressed in prison outfits, the two former Samsung employees sat silently as the prosecutor asked, “What would have been the financial damage if this drawing had fallen into China’s hands?” she asked.
The men, one a former senior researcher at Samsung Display, were arrested for allegedly trying to leak Samsung’s technologies for organic electroluminescent, or OLED, panel production to China — in violation of the industrial technology protection law.
Prosecutors allege they collaborated with a South Korean equipment maker to develop a display production machine based on Samsung technologies in order to sell it to a Chinese company. A third defendant, a manager at the equipment supplier, is also on trial.
The investigation that led to the arrest of the Samsung employees stemmed from a secret inspection by the National Intelligence Service, South Korea’s chief intelligence agency of the private residence of the employees.
The South Korean government has designated technologies related to OLED panels as “national core technologies,” and the NIS has a section dedicated to making sure those stay within the country.
If found guilty, the three defendants face at least three years in prison.
It’s also been revealed that in the five years to 2019, there were 123 cases of technology leaks from South Korea, according to a report submitted by the NIS to the national assembly.
The total included 83 leaks to China, many of which involved technologies in fields where South Korean companies are strong, such as semiconductors, displays and mobile phone manufacturing.
To protect their secrets the Company who has just released the Samsung Galaxy S21 has gone to great lengths to ring fence their employees.
The Company now disables the camera and audio-recording functions of employees’ smartphones at its laboratories and factories.
At one laboratory, the printing paper used in copying machines contains metal foil, part of a detection system intended to stop employees from printing out sensitive information and taking it out of the lab without permission. Alarms sound if the paper leaves the building.
The Company has also refused employees permission to take documents with technical information out of the office despite COVID-19 issues.
But however thorough Samsung tries to be in such measures, the company has 287,000 workers around the world — and they are able to switch jobs.
Attempts to poach Samsung employees by Chinese Companies is rampant.
Job opportunities posted on online job-hunting sites in South Korea often include such phrases as “Work location: inland region of China” or “Wanted: workers from display-related companies,” alongside the promise of “favourable treatment for workers from S + L.
The initials stand for Samsung and LG Electronics, whose employees are often courted with promises of lucrative salaries and generous pay rises.
BOE Technology Group, the biggest Chinese panel maker now around 120 South Koreans working at its plants and laboratories, many are former Samsung and LG executives.
50 of these employees are former Samsung engineers who previously worked on the development of OLED panels for Apple smartphones.
BOE’s plant in Chengdu, in the Chinese province of Sichuan, has production lines set up identical to Samsung Display’s main plant in Asan, South Chungcheong Province, in South Korea.
BOE now supplies OLED screens for the iPhone.
Backed by the Chinese government, BOE’s push to become a full-fledged display provider for Apple makes it a serious threat to Samsung’s global market share.
The move against Samsung appears to be fully sanctioned by the Chinese Communist Government.
Currently the Chinese owned BOE Company is pitching to strip business away from Samsung in the OLED display market.
One BOE engineer told the Korean Herald that he avoids direct flights for fear of being detained — on suspicion of leaking core technology — during re-entry checks at Incheon International Airport near Seoul.
Flying over busy air routes, he pretends to be an ordinary businessman.
In 2020, BOE’s top executive recruited Chang Won-ki, a South Korean industry veteran who once served as the head of a joint venture for liquid crystal display panel production between Samsung and Sony, for the post of vice chairman at a Chinese maker of display semiconductors.
During the COVID-19 epidemic headhunting companies have stepped up their approaches to engineers at Samsung’s research centre for computer chip production technology.
The Chinese threat to Samsung was predicted by the company’s previous leader, the late Lee Kun-hee, who was not only the architect of the company’s global rise but foresaw its next challenges.
“In the next 10 years, most of the businesses and products Samsung is known for will disappear,” Lee, who died in October, said in March 2010.