Key points
- Samsung Display factory files were allegedly hidden for China
- A Samsung Display engineer found the files
- Samsung SDS code allegedly went to a Chinese company
On November 11, the Seoul Eastern District Prosecutors' Office charged four employees of a Samsung partner company, including a senior executive, with trying to take Samsung Display's LCD manufacturing data for use at a Chinese company. The four weren't detained.
In the same announcement, prosecutors charged three former executives of the same company, two former chief executives and a former vice president, along with the company itself. They're accused of using software code that belongs to Samsung SDS (018260) without permission and giving core parts of it to a Chinese company, Hankyung (한국경제) reported.
The reports don't name the company or the Chinese companies involved.
Prosecutors say files were hidden on equipment Samsung Display was selling
The company builds and maintains factory-automation systems for display and chip makers. It was checking the network setup and condition of equipment that Samsung Display was selling at its LCD plant in Asan, South Chungcheong Province.
Prosecutors say employees compressed log files from the control computers of photo, sputter, and CVD equipment, the machines that print patterns and lay down thin films on the glass. They allegedly did it three times between September and December 2020 and hid the files in places such as a Windows system folder, Financial News (파이낸셜뉴스) reported. Those places were left out of the data deletion meant to clear the machines, prosecutors say.
According to prosecutors, the logs held the temperatures, pressures, and gas flows used to make 8th-generation-class LCD panels. Korea treats that process information as national core technology, the legal category for its most sensitive industrial know-how.
A Samsung Display engineer found the hidden files, so the attempt to take them abroad failed, Edaily (이데일리) reported. Prosecutors say the employees planned to use the logs to move or modify equipment at a Chinese display maker.
The four are charged under the Industrial Technology Protection Act and the Unfair Competition Prevention Act, Korea's trade-secrets law.
The Samsung SDS code goes back to 2011
In November 2011, the company sold the copyright to its factory-automation software to Samsung SDS for 7.4 billion won ($5.5M). It kept using the software under a resale contract with Samsung SDS, Aju Business Daily (아주경제) reported.
That contract ended in May 2019, and the company kept using the code anyway, prosecutors say. Prosecutors say a former CEO and the former vice president then built a product on the code for a Chinese company's own use, starting in June 2019. They allegedly gave that company source code that included Samsung SDS trade secrets.
The reports also give figures for the projects. Between June 2019 and March of this year, the company allegedly used the code in 33 factory-automation projects overseas worth about 32.1 billion won ($24.0M), and in 10 in Korea worth about 4.8 billion won ($3.6M). Another report says the company allegedly copied the Samsung SDS program without permission in 33 projects in Korea and abroad worth about 15.7 billion won ($11.8M). A third dates a set of about 33 projects to August 2017 through June 2022. The reports don't explain how these figures relate to each other.
The three former executives are charged under the Copyright Act and the Unfair Competition Prevention Act. The Seoul Metropolitan Police Agency sent the cases to prosecutors between July and November 2023, and prosecutors then searched the company's office.
Prosecutors say data left on old machines needs protecting
"If a competitor uses the manufacturing and operating information left on computers and other equipment, the company that developed the technology can lose its competitive edge," the prosecutors' office said.
"As an office that focuses on cybercrime, we'll respond firmly to leaks of national core technology and trade secrets that use digital tools," it continued.
"Once a software contract ends, the source code needs to be managed so it isn't used without permission or handed to a third party," an official at the office said.
Most detected leak cases didn't involve national core technology
Korean police caught 179 technology leak cases in 2025, and only eight of them involved national core technology, as we reported in September. Insiders at the victim company accounted for 82.7% of the 179 cases. In this case, the people charged worked for an outside partner.
Meanwhile, Korea's new espionage offence for people acting for a foreign country took effect in September. It covers state secrets and doesn't cover national core technology as such.
Quotes are translated from Korean. Won figures are converted at 1,334.9 won to the dollar, the Naver Finance rate on November 11, 2026.
