The latest twist in the global battle over semiconductor manufacturing comes from China, which is determined to reclaim its lost ground. The Chinese are investing tens of billions to build the world’s most advanced chipmaking operations – and, in doing so, could potentially overtake Korea as the top player.
South Korea is bolstering its security measures to combat this threat. The government will create a database of engineers and monitor their travel in and out of the country to deter poaching by Chinese competitors and keep key technology from ending up in foreign hands.
Frequent leaks of chip, battery, and autonomous car technologies from Korean companies to overseas companies have prompted the country’s large business lobby group, the Federation of Korean Industries (FKI), to ask for harsher punishments. Under existing guidelines, people caught leaking core expertise to foreign businesses are punished with five years or more jail terms. But these sentences fall short of what is needed to deter people from stealing core technologies, the trade ministry said in a statement on Monday.
In recent months, the country has ramped up its efforts to crack down on technology leaks, with police arresting 77 people in 35 cases of industrial espionage in 2023 alone. In addition, the government has set up a task force to investigate high-profile incidents.
The move to strengthen penalties for stealing industrial secrets will be included in a revised draft law submitted to parliament, the industry ministry said. It said that rules to block technology leaks that had not been regulated, including after a private equity fund buys out a company, will also be added to the new legislation.
However, there are limits to how much Seoul can do to limit industrial espionage by its competitors. For example, although the country’s top memory producers – Samsung and SK Hynix – have facilities in China that make chips sophisticated enough to be subject to U.S. export controls, those companies are owned by foreign investors. They can avoid the regulations by accessing their computing capacity through the cloud.
Amid the increased scrutiny of online rumors, President Park Geun-hye has ordered her ministers to investigate what she calls “unfounded stories” that have “divided society.” In September, the president complained about insults about her from her critics and said the public should be able to see private messages exchanged in messenger apps like Kakao Talk without being censored by authorities. Kakao, owned by Internet portal and app developer Daum Kakao, denied giving authorities access to private messages without a court order.
The government also monitors foreign workers in the sector and has drafted new rules to prevent bribes paid to Chinese employees in return for revealing information to their employers. Those rules will be implemented early next year. They will include a requirement that any employer that hires Chinese staff must verify their identity by checking ID documents and the validity of work permits.