South Korea Fights to Guard Its Trade
Secrets From China
March 4, 2021
leading role in high-tech industries has made it an attractive target
for fast-rising Chinese rivals in search of enhanced capabilities in
semiconductors, computer displays and shipbuilding, among other
The methods employed by China run the gamut, from relatively benign
attempts to recruit skilled workers to more nefarious practices,
including bribing South Koreans to divulge trade secrets and illegally
hacking into company computer systems.
The recruitment efforts often are highly alluring. South Korean
job-search websites are filled with ads from Chinese companies with
language such as “living expenses and children’s education provided,” or
“two-year contract with competitive salary and bonus.”
“Basically, your annual salary will double,” explained a businessman
with a South Korean semiconductor firm, who travels frequently between
Beijing and Seoul, and who asked not to be identified for reasons of
“For example, there’s not enough talent in circuit board design in
China. So, they will post a recruiting ad offering a two-year contract,
with twice the salary of an average designer in South Korea. Housing and
education for kids will be covered, too.”
The businessman said the Chinese firms generally limit their job offers
to two-year contracts. “After they’ve learned everything, they will end
the contract and look for other talents they need.”
Japan’s Nikkei financial news organization has reported that Chinese
display maker BOE, which has been vying for Apple’s iPhone business for
years, has hired about 120 South Koreans. These include more than 50
former Samsung engineers who led the development of OLED screens for the
Nikkei also reported that at least 62 South Korean names appeared in the
patents filed by China’s Semiconductor Manufacturing International
Corporation (SMIC), which is on a U.S. government blacklist.
Park Wonhyeong, a professor in the Department of Information Security
Engineering at Sangmyung University in Seoul, told VOA that headhunting
is just one of the ways China acquires advanced technology from South
“In many cases, Chinese companies are purchasing trade secrets or
industrial technologies directly from employees in major South Korean
companies,” he said.
Corporate espionage is a major concern for leading South Korean
companies. This month, two former Samsung employees were sentenced to
two years in prison for trying to leak Samsung’s OLED secrets to China
in violation of the industrial technology protection law.
Samsung, a leading maker of smartphones, TV displays, semiconductors and
home appliances, had revenue of nearly $60 billion in 2020. Ensuring
Samsung’s continued success and protecting its trade secrets is a matter
of national importance for Seoul.
Even more concerning, Park said, is a concerted drive by Chinese hackers
to steal trade secrets by attacking the internal systems of Korean
companies. He said the Chinese hackers are good at finding loopholes in
the corporate systems through search engines such as SHODAN, which let
the user find specific types of computers connected to the internet
using a variety of filters.
said the attacks can be reliably traced to Chinese hackers from the
malicious code that is used.
“But why would they target things like customer service that is not key
to trade secrets?” he asked. “It’s because they want to penetrate into a
company’s internal system through a less guarded department, and then
attack the headquarters, which usually has stronger security measures.”
He said there is evidence that some of these hackers are members of
China’s People’s Liberation Army or otherwise linked to the Beijing
South Korea’s National Intelligence Service has identified 123
technology leaks from South Korea from 2015 to 2019, including 83 leaks
that went to China. Many of the leaks involved technologies where South
Korean companies have a lead on competitors.
In response, the Seoul government has toughened penalties for technology
leaks and has listed high-tech trade secrets as “national core
Companies like Samsung also have increased security practices to prevent
employees from stealing sensitive data.
Samsung requires employees to disable cameras and audio-recording
functions of their smartphones before entering its labs and factories.
And at some labs, the company uses paper embedded with metal foil to
activate sensors if employees try to remove documents without