Prosecutors have indicted three former employees of a mid-sized South Korean company accused of taking its semiconductor testing technology overseas and using it to build a competing business.
The Ministry of Intellectual Property's special judicial police unit for technology leaks and the Daejeon District Prosecution Service's second serious crimes division said on the 14th that they had indicted a 45-year-old suspect identified as A with detention on charges of violating the Unfair Competition Prevention Act and the Industrial Technology Protection Act. Two others, identified as B and C, both 40, were indicted without detention on the same charges. The case marks the first in which the ministry's technology police detained a suspect in an overseas technology leak and prosecutors brought charges.
According to the technology police, all three previously worked at a domestic manufacturer of semiconductor testing equipment. They moved to a chip testing equipment maker set up by a distributor that handled the Korean company's overseas sales. The overseas manufacturer was co-founded by a 58-year-old former executive of the Korean company, identified as D, who also arranged the three suspects' job moves. A, B and C each left for the overseas firm on terms that doubled their previous salaries.
The three are accused of taking design drawings and other key materials for probe cards, a type of semiconductor testing equipment, from their former employer and using them to produce and supply probe cards overseas between November 2023 and February this year. Probe cards are used to test semiconductor chips for defects while they are still in wafer form. The market has been dominated by U.S. and Japanese companies, and the victimized firm had succeeded in localizing probe card manufacturing technology. It developed equipment for testing high-bandwidth memory (HBM) and has supplied major chipmakers at home and abroad. The company estimated it would lose 40 billion won ($28 million) in annual revenue if the alleged scheme costs it overseas market share.
The technology police opened their investigation in July last year after receiving intelligence from the National Intelligence Service. After finding indications that the overseas manufacturer founded by D was using Korean supply chains for procurement and design work, investigators searched a domestic design firm in July this year. They have also requested an Interpol red notice for D, who is believed to be abroad, and plan to pursue further investigation once D is in custody.