From Laboratory to Competitor: The Largest Scandal in the Semiconductor Industry

South Korean prosecutors have uncovered one of the most high-profile industrial espionage cases of recent years. In Seoul, charges have been brought against ten former employees of Samsung Electronics, who are suspected of systematically transferring secret semiconductor manufacturing technologies to the Chinese company ChangXin Memory Technologies (CXMT). The case involves the theft of key know-how related to the production of 10-nanometer DRAM memory, the value of which is estimated at more than $1 billion.

According to investigators, the leak concerned technologies that, at the time of their development, had no commercial analogues in the world. Samsung was the only company capable of producing 10-nm DRAM on an industrial scale and viewed this technology as a strategic competitive advantage for years to come.

Five Years of Industrial Espionage

The central figure in the case is a former Samsung researcher who, according to prosecutors, deliberately and methodically copied the company’s internal manufacturing processes over a period of five years. Notably, the leak did not occur through digital channels, but almost in an old-fashioned way – by hand.

Investigators determined that the suspect manually copied more than 600 critically important stages of production. The notes contained precise parameters of gas flows, photoresist settings, etching specifics, and details of lithographic processes. Such parameters rarely appear in formal documentation and represent the quintessence of engineers’ practical experience.

Samsung invested around 1.6 trillion South Korean won in the development of this technology, equivalent to approximately $1.1 billion. These costs included not only research and equipment, but also years of experimentation, errors, and process optimization that cannot be reproduced solely on the basis of theory.

CXMT’s Rapid Technological Leap

The stolen data enabled CXMT to make a leap that many experts considered impossible without external assistance. The Chinese company began producing 17-nanometer DRAM in 2022 and already moved to the 10-nanometer class in 2023. By comparison, such a transition typically takes leading global manufacturers much longer and requires enormous investments.

An expert analysis showed that CXMT’s technologies match Samsung’s solutions by 98.2%. This indicates not just the borrowing of general principles, but an almost complete reproduction of the technological chain. As a result, CXMT became the first Chinese company and the fourth in the world to master the production of 10-nm DRAM.

For China, this represented an important strategic achievement amid technological sanctions and restrictions on access to Western semiconductor technologies.

A Complex and Well-Organized Scheme

The investigation also revealed details of how the espionage network was organized. CXMT, founded in 2016 with active financial support from local authorities, from the outset focused on poaching key Samsung specialists. Total initial investments were estimated at 2.6 trillion South Korean won.

The suspects used shell companies, frequently changed offices, and employed primitive but effective methods of conspiracy. One such method was a system of conditional signals: sending four heart icons in a messenger served as a warning to colleagues about a possible arrest or a travel ban.

Participants in the scheme received salaries from CXMT that were 3-5 times higher than those at Samsung, as well as additional bonuses and guarantees of employment in China. For many, this became the decisive argument that outweighed legal and reputational risks.

Scale of the Damage

Prosecutors estimate Samsung’s direct losses in 2024 alone at 5 trillion South Korean won, equivalent to approximately $3.7 billion. At the same time, the total damage to South Korea’s national economy could be significantly higher.

The semiconductor industry accounts for about 20.8% of the country’s total exports, and the loss of technological leadership in this sector directly impacts economic security. This concerns not only lost profits, but also declining investor confidence, weakened positions in the global market, and increased dependence on geopolitical factors.

This case clearly demonstrates that even in the era of cybersecurity and digital protection systems, leaks can occur through the most vulnerable channel – the human factor. Handwritten notes taken out of a laboratory proved more effective than complex hacking attacks.

Context and an AI Perspective

From the standpoint of global trend analysis, this incident fits into the broader picture of intense technological competition between China and the Western world. History offers many similar examples, from Soviet espionage around the atomic project in the 1940s to the active borrowing of automotive technologies by Japanese companies in the 1980s.

Each such episode led to tighter security measures and accelerated development of new approaches to protection. The paradox of the situation is that CXMT now possesses technologies that Samsung spent years developing, but without access to a full-fledged ecosystem of knowledge, engineering culture, and accumulated experience.

Stolen technological “recipes” are merely a snapshot of a particular moment. The semiconductor industry requires continuous innovation, constant process improvement, and deep team integration. The question remains open: will CXMT be able to turn borrowed knowledge into a sustainable competitive advantage, or will it remain permanently in the role of a follower, copying stages that others have already passed?

One thing is already clear: in the technological race of the 21st century, the stakes are so high that even a single engineer with a notebook can shift the balance of power in the global market.