[Helpless Technology Leak] China Cornered by US Advanced Industry Checks... Eyeing Korean Technology Closely

Core Industries like Semiconductors and Secondary Batteries Targeted for 'Technology Theft' in China
Authorities Detect About One Case per Month... Police Agency Launches Special Crackdown Starting Today

[Sejong=Asia Economy Reporters Haeyoung Kwon and Gwanju Lee] #The management of domestic semiconductor equipment company A decided to become 'industrial spies' to open up the Chinese market. This company is a major partner of SK Hynix, a leading semiconductor maker, and 16 people including executives stole core technology related to cleaning processes that remove impurities from substrates and secretly handed it over to Chinese competitors. They also directly manufactured export semiconductor cleaning equipment priced at 7 billion KRW per unit, based on the blueprints of semiconductor cleaning equipment first developed by a Samsung Electronics partner. A’s technology leakage was detected by the National Intelligence Service.

Concerns over technology leakage in national core industries such as semiconductors and secondary batteries are gradually increasing. As the U.S. declares protection of core technologies to counter China and countries introduce policies to prevent talent outflow, South Korea is becoming a target for China’s 'technology extraction.'

Attempts to leak core technologies have noticeably increased this year. According to data submitted by the Ministry of Trade, Industry and Energy to Rep. Myungho Kwon of the People Power Party on the 3rd, the number of detected cases of overseas leakage of national core technologies identified by domestic intelligence agencies was four from January to March this year. This means about one case was detected by authorities every month. Although only three months have passed, this is nearly half of last year’s total detected cases (9 cases).

National core technologies refer to technologies that could seriously harm national security and economic development if leaked overseas. Export or overseas sale requires government approval, and 71 technologies across 12 fields including semiconductors, displays, electrical and electronics, automobiles, and shipbuilding fall under this category.

From 2015 to March this year, a total of 37 core technologies were leaked, with shipbuilding accounting for the most at 14 cases. This was followed by electrical and electronics (10 cases), displays (5 cases), automobiles (4 cases), information and communications (2 cases), and steel and others (2 cases). The number of detected cases has gradually increased from 3 in 2015 to 9 in 2020.

Industry insiders expect that most of the leaked national core technologies have gone to China. According to the National Police Agency, cases of overseas leakage of industrial technology and trade secrets increased from 12 in 2014 to 20 in 2018, with China accounting for 48 out of 71 cases, or 68%. Many of these were in the semiconductor and 5G communication fields.

The problem is that the possibility of core technology leakage may increase further in the future. As the U.S. blocks China’s pursuit in advanced industries such as digital, artificial intelligence (AI), and bio, and reorganizes supply chains led by itself, China, cornered, may openly attempt to steal technology from South Korea.

The National Investigation Headquarters of the National Police Agency announced on the same day that it will conduct a six-month 'Special Crackdown on Overseas Leakage of Industrial Technology' from this month until the end of October. It especially expects that China’s attempts to steal technology and personnel will steadily increase.

A police official emphasized, "We will operate a special crackdown period on overseas leakage offenders of industrial technology to protect domestic companies’ core technologies and contribute to enhancing national competitiveness."

This content was produced with the assistance of AI translation services.