A former Samsung Electronics employee who joined Chinese memory chipmaker ChangXin Memory Technologies (CXMT) in 2016 was sentenced by the Seoul High Court to five years in prison on October 22 for leaking Samsung technology, according to the report. The sentence was reduced from seven years imposed at his first trial in April.
The case reflects growing competition over semiconductor expertise as Chinese manufacturers make progress against established rivals. Companies are seeking skilled engineers while tightening measures to protect manufacturing knowledge and other trade secrets.
Samsung has long used non-compete agreements to restrict some employees from joining rivals for two years. In 2023, a South Korean court backed the company’s request to prevent a former DRAM researcher from moving to U.S. chipmaker Micron, ruling that the restriction was not excessive and was needed to protect Samsung’s technology and business information, JoongAng Ilbo reported.
A former Samsung employee said the company had previously been more concerned about staff moving to established competitors such as SK Hynix and Micron. Samsung also monitored where some departing employees went, partly to signal to remaining staff that a move to a competitor could be difficult. Senior employees with valuable technical expertise were likely to face closer scrutiny, the former employee said.
Chinese semiconductor companies, meanwhile, have tried to attract experienced engineers from overseas with high salaries, stock options, housing and support for their families, said Jeongku Choi, a senior analyst at Counterpoint Research. Choi said their expertise has helped address technical bottlenecks, particularly as U.S. export restrictions have limited China’s access to advanced chipmaking equipment. Chinese manufacturers, once considered unlikely to catch up, are now “meaningful competitors,” she said.
Counterpoint’s Memory Tracker projected that CXMT would account for 10% of global DRAM revenue in the second quarter of 2026. Established chipmakers are responding with stronger legal and internal security protections, as well as compensation changes aimed at retaining key engineers, Choi said. South Korea has also classified certain semiconductor manufacturing technologies as National Core Technologies, increasing penalties for unauthorized disclosure.
The legal contest could widen if Chinese memory companies expand their exports beyond their home market. Choi said trade-secret management could then extend further into intellectual property and legal disputes.
Rules on employee movement and trade secrets vary across the region. In Taiwan, post-employment non-compete agreements are limited to two years, and employers must pay former employees at least half their average monthly salary during the restricted period, said Jamie J. Yang, an intellectual property and antitrust partner at Innovatus Law. Yang also noted that semiconductor manufacturing is so complex that one engineer is unlikely to know enough to reproduce an entire production line elsewhere.
In Singapore, Lee & Lee partner Zechariah Chan said trade secrets can be difficult to protect because they often involve intangible manufacturing methods. It can also be hard to prove that a competitor has used those techniques when outsiders can see only the finished product. General skills remain with an engineer, Chan said, while trade secrets belong to the company.
Hong Kong courts generally take a restrictive approach to non-compete clauses, enforcing them only when they protect legitimate business interests and go no further than necessary, said Jezamine Fewins, head of litigation at Lewis Silkin in Hong Kong. Courts are more willing to protect trade secrets through injunctions, she said, although confidential knowledge can be difficult to separate from what an employee carries in their memory.
Fewins said companies should clearly identify what they consider trade secrets, make employees aware of that information and limit access with appropriate safeguards. Samsung and CXMT did not respond to requests for comment.
Sources: CNBC Markets.