South Korea charges 10 over alleged chip technology leak to China's CXMT

SEOUL, Dec 26 (Reuters) - South Korean prosecutors have indicted 10 people on suspicion of leaking memory chip manufacturing technology to Chinese chipmaker ChangXin Memory Technologies (CXMT), a case authorities say helped pave the way for China’s development of high-bandwidth memory (HBM), a critical component for artificial intelligence computing. The Seoul Central District Prosecutors’ Office said on Tuesday five people, including a former Samsung Electronics (005930.KS) executive and engineers, were charged and held in custody for violating South Korea’s industrial technology protection law, while another five were charged but allowed out on bail. Prosecutors said a former Samsung Electronics researcher who was leaving his job to join CXMT copied out hundreds of steps of proprietary DRAM manufacturing processes by hand, recording detailed process recipes covering equipment specifications, sequencing and yield optimisation. The handwritten notes were later used to reconstruct the manufacturing flow at CXMT, they said. The investigation also found CXMT obtained additional DRAM technology from SK Hynix (000660.KS) through a supplier, further accelerating its development. Samsung Electronics, SK Hynix and CXMT declined to comment. The statement on Tuesday did not name the companies involved, but prosecutors confirmed the names of the companies separately with Reuters. The leaked technology involved 10-nanometre DRAM processes that Samsung spent 1.6 trillion won developing, prosecutors said, adding that Samsung was the only firm to have commercialised such technology at that time. Prosecutors said CXMT subsequently adjusted and validated the stolen data to suit its own equipment, enabling it to achieve production of 10-nanometre DRAM in 2023, the first achievement by a Chinese firm. The illegal use of the technology laid the ground for CXMT’s development of HBM, prosecutors said, adding the losses for companies such as Samsung Electronics were estimated to amount to at least tens of trillions of won. CXMT, which is eyeing a Shanghai listing at a valuation of $42 billion, last month unveiled its latest generation of DRAM, known as DDR5, in a direct challenge to its South Korean rivals.