CNBC reports that a former Samsung Electronics employee received a five-year prison sentence for leaking Samsung technology; an appeals court reduced the original seven-year term.
The employee joined Chinese memory-chip maker CXMT in 2016.
The case offers a view into how semiconductor firms navigate the protection of technical know-how as experienced staff move between competitors.
On October 22, the Seoul Appeals Court sentenced a former Samsung Electronics employee to five years in prison for leaking the company’s technology, according to CNBC. The former employee was hired by Chinese memory chip maker ChangXin Memory Technologies (CXMT) in 2016. His sentence was reduced from the seven years he was given in his first trial in April.
In another case, a South Korean court in 2023 granted Samsung's request to block a former DRAM researcher — a type of memory — from being hired by U.S. rival Micron. According to the JoongAng Ilbo newspaper, the court ruled that the two-year restriction on working for a competitor was not excessive and was necessary to protect Samsung's technology and business information.
The battle for engineers
About a decade ago, Samsung was more concerned about engineers leaving for established competitors like SK Hynix and Micron than for Chinese companies, according to a former employee who spoke to CNBC on condition of anonymity because the information was confidential. Another former employee said the company tracked where some departing employees went to show staff that moving to a competitor wouldn’t be easy.
Samsung used non-compete agreements as part of employment contracts, which prohibited employees from hiring competitors for two years. Senior executives with valuable technical experience were likely under tighter scrutiny.
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China, for its part, is seeking to bolster its semiconductor industry by attracting experienced engineers from abroad. The packages offered include high salaries, stock options, housing and support for their families, according to Jeongku Choi, a senior analyst at Counterpoint Research. Choi said the experience of these engineers has helped Chinese manufacturers overcome technical hurdles at a time when U.S. export restrictions are making it difficult for China to access advanced chip-making equipment. Chinese companies, once seen as unlikely to catch up with established competitors, are now seen as significant rivals, he added.
According to Counterpoint’s “Memory Tracker” report for the second quarter of 2026, CXMT’s share of global DRAM revenue is expected to reach 10%. This is a forecast. Choi also said that established manufacturers are strengthening legal and internal safeguards, while adjusting compensation packages to retain their key engineers. South Korea has designated certain semiconductor manufacturing technologies as “National Key Technologies,” increasing penalties for their unauthorized disclosure.
Choi believes that disputes over trade secrets and intellectual property may intensify when Chinese memory companies expand beyond the domestic market and increase their exports.
The limits of protection
In Taiwan, home to TSMC, the world’s largest third-party chipmaker, post-employment non-compete agreements cannot last more than two years. Employers must pay former employees compensation equal to at least half of their average monthly salary for the duration of the restriction, according to Jamie J. Yang, a partner at Innovatus Law specializing in competition law and intellectual property.
Yang noted that the complexity of semiconductor manufacturing makes it difficult for a single engineer to have enough knowledge to replicate an entire production line at another company. However, he estimated that the increased competition for top engineers could lead to a slight increase in turnover between competitors, as well as more litigation over trade secrets.
Protecting know-how is also a challenge in Singapore. Zechariah Chan, a partner at law firm Lee & Lee, said that in the semiconductor industry, trade secrets can be difficult to protect, as proprietary knowledge often involves intangible techniques and manufacturing methods.
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