[Tech Talk] Repeated Semiconductor Technology Leaks... Growing Concerns Over Following Japan's Footsteps

Semiconductor Industry Competitiveness Depends on Core Engineers
High Risk of Being Overtaken if Know-How Leaks
Japan Also Lost to Latecomers in the 1980s

Concerns are growing within the industry as core technologies of the strategic semiconductor industry are being leaked one after another. The fact that the final destination of the leaked technology is China, which is betting its life on the 'Semiconductor Rise,' is also a cause of anxiety. There are warnings that South Korea could follow the same path as Japan, once the strongest electronic industry powerhouse, which was overtaken in technological prowess by South Korea and Taiwan.

According to multiple media reports on the 14th, six people, including Mr. A, a former semiconductor engineer and executive at Samsung Electronics, have been indicted on charges of smuggling core technology overseas.

Mr. A, who currently serves as the CEO of a semiconductor company in China, attempted to leak key blueprints related to Samsung's semiconductor factory (fab). This technology has been designated as a national core technology, and its value is known to approach at least 300 billion KRW.

It is not a new occurrence that former engineers who worked on the front lines of the domestic semiconductor industry have been caught leaking technology overseas. In 2021, 17 engineers who leaked core DRAM-related technology abroad were also indicted by prosecutors.

Samsung Electronics Xi'an Semiconductor Factory in China
[Photo by Yonhap News]

The common factor in these incidents is that most involve former domestic engineers and researchers moving to overseas companies. This is also related to the knowledge-intensive nature of the semiconductor industry.

Like many advanced manufacturing industries, the proficiency of on-site engineers in semiconductors determines yield and production efficiency. How manufacturing equipment is arranged in the factory and how it is operated directly affects the ratio of good products. Engineers who have physically acquired this know-how are highly coveted strategic assets for competitors, especially emerging overseas companies.

When South Korea was still nurturing its semiconductor industry, Korean companies secured technological prowess by recruiting highly skilled Japanese engineers. In this regard, on February 5th (local time), a Japanese economic media outlet published an interview with a Japanese engineer who moved to Samsung in the 1980s.

Mr. B, who now works as a semiconductor consultant in South Korea, emphasized in the interview, "Samsung treated me, who was just a researcher, with great respect, even accompanying me to executive meetings," and added, "Seeing their attitude, I felt that fighting on the global stage was more valuable than working as a regular researcher until retirement."

In the 1980s, Japan was already a semiconductor and electronics superpower but was complacent with the status quo and deliberately forgot the rapid rise of trailing companies.

TSMC's semiconductor factory under construction in Kumamoto Prefecture, Japan
[Image source=Yonhap News]

The talent pool of Japan's semiconductor industry, once considered the best in the world, has noticeably diminished. Even within Japan, which is promoting a national-level semiconductor industry reconstruction strategy, the biggest obstacle is cited as a 'lack of competent engineers.'

Having harshly experienced the 'brain drain' of semiconductors, Japan is currently enforcing very strict technology leakage control policies. The Kishida Fumio Cabinet is accelerating the enactment of the 'Economic Security Promotion Act,' which stipulates imprisonment of up to two years for engineers who leak advanced technology.

The problem is that the situation Japan faced in the past, losing core talent and technology, could be reproduced in South Korea. South Korea has built unparalleled capabilities in the 'memory semiconductor' field, such as DRAM and NAND, which were the strengths of Japan's former semiconductor industry, and this is the area where it directly competes with Chinese companies. This is why Chinese companies blatantly covet domestic talent.

The government is also stepping up efforts to prevent the leakage of strategic technology. On April 11th, the Korean Intellectual Property Office and the Ministry of the Interior and Safety established the 'Semiconductor Examination Promotion Team,' which exclusively reviews semiconductor-related technologies. This dedicated organization was created to closely monitor patent infringement and technology leakage by focusing solely on semiconductors.

In the political sphere, there are calls to increase the penalties for technology leakage crimes. On the 13th, Yoon Hee-seok, spokesperson for the People Power Party, stated in a commentary, "If we only impose light punishments while failing to prevent technology and talent leakage, we cannot protect the future of the Republic of Korea," and emphasized, "The People Power Party and the government will do their best to prepare legal and institutional measures, including strengthening sentencing standards for technology leakage crimes."

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