Chinese chipmaker CXMT in crosshairs of South Korean prosecutors over Samsung tech leak

Prosecutors in South Korea have indicted 10 people, including former Samsung Electronics executives, for allegedly leaking the company’s technology to Chinese chipmaker ChangXin Memory Technologies (CXMT).\nThe Seoul Central District Prosecutors’ Office on Tuesday said five people had been arrested, including a former Samsung executive who allegedly recruited key personnel and leaked the company’s proprietary technology to CXMT, according to a report by Yonhap News Agency.\nThey face charges for violating the country’s Unfair Competition Prevention Act and the Industrial Technology Protection Act, according to the prosecutor’s Information Technology Crime Investigation Department.\nAnother five individuals, including CXMT employees, were indicted without detention on the same charges, the Yonhap report said.\nSouth Korean prosecutors alleged that CXMT recruited a former Samsung vice-president as a research department head soon after the Chinese chipmaker was established in 2016. CXMT made the executive responsible for poaching key Samsung engineers to bolster development of its 10-nanometre dynamic random access memory (DRAM) technology.\nThe legal fallout has cast a shadow over CXMT, which had made strides to catch up with global makers of advanced memory chips and pushed forward Beijing’s drive for semiconductor self-reliance.\nSamsung and CXMT did not immediately respond to requests for comments on Friday.\n\nA former Samsung researcher also allegedly copied by hand the company’s “Process Recipe Plan” for DRAMs – a critical document of its manufacturing programme – and provided it to CMXT, prosecutors said in a press conference on Tuesday.\nThe authorities argued that those actions enabled CMXT to become the first Chinese company to successfully mass-produce 10-nm DRAMs in 2023, which resulted in an estimated sales decline of 5 trillion won (US$3.5 billion) for Samsung in 2024 alone.\nLast month, CXMT achieved breakthroughs with the launch of its new Double Data Rate 5 (DDR5) DRAM products, reflecting the company’s efforts to challenge the dominance of South Korean memory giants Samsung and SK Hynix and US-based Micron Technology.\nWith high frequency and expanded memory, CXMT’s new DDR5 products are targeted at state-of-the-art AI computing servers and stacks.\nThe Chinese chipmaker had also unveiled the LPDDR5X series, an advanced DRAM product line targeted at mobile devices, which entered mass production earlier this year.\nCXMT was also preparing an initial public offering on the mainland, after completing in July its counselling recordation, the formal filing of pre-listing guidance with the securities regulator.\n