Report: Ex-Semiconductor Employees Nabbed In $600M Intellectual-Property Heist

The ex-employees of Hynix Semiconductor were trying to set up a competing flash memory maker in China.
LONDON — Seven former employees of Hynix Semiconductor Inc. have been accused of stealing chip manufacturing intellectual property worth 624.5 billion won (about $600 million) as part of an attempt to set up a flash memory maker in China called LMNT, according to a Donga report.

Five alleged industrial spies have been indicted and detained and two others indicted without physical detention on charges of stealing chip manufacturing process technology, according to the report, which cited the high-tech crime investigation department of the Seoul Central District Prosecutors Office, as its source.

All seven are employees of LMNT including a vice president of the company called Kim, the report said.

Kim set up LMNT in the Cayman Islands, a tax haven, in March 2004 after retiring from Hynix semiconductor in May 2003. He is accused of asking six former colleagues who were still working at Hynix to steal chip manufacturing process design documents and manufacturing process technology information, the report said.

One of the six allegedly stole fifteen CDs containing core semiconductor technology in May and June of 2004 and joined LMNT, the report said.

LMNT came to public attention on news that it was preparing to raise and spend $1.4 billion to build a flash memory wafer fab in Beijing, in March 2004. At the time it was observed that no details had been given about where LMNT would license its technology from, or whether its flash memory would be of the NOR or NAND type. A report at the time said LMNT had employed industry experts from the US, Europe and Japan. The company had said it would begin chip production by the end of 2005, according to reports at the time.

"No technology was leaked to China because we had launched our investigation based on the intelligence we had secured even before they set up the company," the report quoted the Seoul public prosecutor as saying.

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