Indictment details plan to steal Samsung secrets for Foxconn China project

SEOUL, June 27 (Reuters): When former Samsung executive Choi Jinseog won a contract with Taiwan's Foxconn in 2018, he tapped his former employer's supplier network to steal secrets to help his new client set up a chip factory in China, an indictment by South Korean prosecutors alleges.
Prosecutors announced the indictment on June 12, saying the theft caused more than $200 million in damages to Samsung Electronics, based on the estimated costs Samsung spent to develop the stolen data. The announcement did not name Choi and gave only limited details, although some media subsequently identified Choi and his links with Foxconn.
The unreleased 18-page indictment, reviewed by Reuters, provides details in the case against Choi, including how he is alleged to have stolen Samsung's trade secrets and details about the planned Foxconn plant.
Choi, who has been detained in jail since late May, denied all the charges through his lawyer, Kim Pilsung.
Choi's Singapore-based consultancy Jin Semiconductor won the contract with Foxconn around August 2018, according to the indictment.
Within months, Choi had poached "a large number" of employees from Samsung and its affiliates and illegally obtained secret information related to building a chip factory from two contractors, prosecutors allege.
Jin Semiconductor illegally used confidential information involving semiconductor cleanroom management obtained from Cho Young-sik who worked at one of the contractors, Samoo Architects & Engineers, the indictment alleges.
Clean rooms are manufacturing facilities where the enclosed environment is engineered to remove dust and other particles that can damage highly sensitive chips. Samoo had participated in the 2012 construction of Samsung's chip plant in Xian, China.
Prosecutors allege Choi's company also illegally obtained blueprints of Samsung's China plant from Chung Chan-yup, an employee at HanmiGlobal, which supervised its construction and floor layouts of wastewater treatment and other subsidiary facilities involving the chip manufacturing process. They have yet to establish how the information on floor layout was obtained, according to the indictment.
Choi's lawyer strenuously rejected the claims presented in the indictment.
"What prosecutors allege was stolen has nothing to do with how to design or make chips. For instance, there are public international engineering standards to make cleanrooms and that's not something only Samsung has," said Kim.
"A factory layout? You can take a snapshot from Google Maps and experts would know what is inside which building," Kim said, showing a satellite snapshot of Samsung's plant in Xian, China.
The plant was never built after Foxconn pulled out, according to Choi's lawyer and a person with direct knowledge of the case.
Samsung Electronics, the world's biggest memory chipmaker, declined to comment on the matter, citing the ongoing investigations.
In a statement, Foxconn said that while it was "aware of speculation around the legal case in South Korea", the company doesn't comment on ongoing investigations.
"We abide by laws and regulations governing jurisdictions we operate in," Foxconn said.
The indictment does not accuse Foxconn of wrongdoing.