Cyberwarfare / Nation-State Attacks , Fraud Management & Cybercrime , Geo Focus: Asia

South Korean Agencies Crack Down on Insider Theft Epidemic

South Korean technology companies have suffered at least 10 cases of sensitive technology leaks by malicious insiders since January and recorded a 20% rise in such incidents over the previous year.

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The national investigation headquarters of South Korean police said Tuesday the 10 leaks to foreign countries since the beginning of 2024 is the highest figure in a single year since authorities started recording such incidents.

Police said they have arrested 25 people suspected of leaking or selling national core technologies to overseas groups so far. Authorities recovered approximately $3.5 million from six suspects who shared core technologies with overseas companies.

The announcement follows President Yoon Suk Yeol setting up a joint team on Nov. 6 to urgently investigate rising cases of sensitive technology leaks to overseas competitors. Led by the National Intelligence Service, the task force comprises members from key investigative agencies and representatives of the Ministry of Trade, Industry and Energy, the Supreme Prosecutors' Office, Ministry of Justice, the National Police Agency and other ministries.

The presidential action took place shortly after a local court sentenced a former member of Samsung's display unit to six years in prison for selling approximately $24.5 billion worth of OLED technology to China.

The Samsung employee smuggled the company's proprietary OLED display technology to Chinese companies between 2018 and 2020, including optical systems for excimer laser annealing technology and technology used for OCR inkjets that attach outer cover glass to OLED panels.

Authorities previously arrested and indicted five former Samsung employees who participated in the data theft operation and arrested the alleged kingpin after he returned to the country in late 2023 after hiding in China for three years.

In September, authorities also arrested two semiconductor development engineers who sold data on 20 nano-class DRAM processes to Chinese companies, including a highly secretive 600-step process information that contained guidance on how to produce 20nm DRAM semiconductors.

The Suwon District Prosecutors' Office also initiated a trial against two members of a distribution agency for covertly selling to China at least 98,000 semiconductor IC chips imported from the United States. The sale helped China access advanced semiconductor chips and evade U.S. export controls.

Writing for the Maeil business newspaper, researchers Gwangmin Moon and Dongwhan Park said approximately 70% of technology leaks have ended up in China, including 15 out of 25 cases of sensitive data leaks between January and October this year.

In March, the Sentencing Commission of the Supreme Court revised sentencing guidelines for intellectual property and technology infringement offenses, increasing the maximum punishment for the illegal sharing of national core technologies with overseas entities from nine years to 12 years in prison. The National Police Agency has also promised to dedicate more resources to trace and disrupt overseas smuggling of sensitive technologies.

"In order to eradicate advanced and organized overseas technology leak crimes, we are pushing to increase the number of dedicated investigation personnel and introduce the latest investigation techniques such as undercover investigation. While reviewing, we are also working to improve the legal system, such as establishing new regulations for punishment of brokers with related organizations," an official said.