Heavier sentences in Seoul and tougher espionage penalties in Taiwan raise the legal risk for the engineers and recruiters behind CXMT's projected rise to 10% of global DRAM revenue.
Chinese chipmakers’ drive to hire experienced engineers is running into tougher trade-secret enforcement in South Korea and Taiwan. CNBC reported on November 4 that Chinese chipmakers are recruiting experienced engineers abroad with high salaries, stock options, housing and family support, while established companies answer with stronger legal protections, tighter internal security and better pay to keep key staff. The case at the center of its report is that of a former Samsung Electronics employee who joined ChangXin Memory Technologies (CXMT) in 2016 and was sentenced to five years in prison by the Seoul High Court on October 22.
The first trial in April had imposed seven years. CNBC said Samsung and CXMT did not respond to requests for comment. A former Samsung employee told the broadcaster that "the company wanted to send a message to those who stayed."
The stakes have grown with CXMT itself. The Hefei memory maker now trades on Shanghai’s STAR Market and is moving into AI memory production. CNBC cited Counterpoint Research’s Memory Tracker for the second quarter of 2026, which projected that CXMT’s share of global DRAM revenue would reach 10%. Jeongku Choi, a senior analyst at Counterpoint, told CNBC that Chinese manufacturers are now seen as "meaningful competitors."
Korean courts treat DRAM know-how as national core technology
The Seoul Economic Daily identified the defendant only by the surname Jeon. Criminal Division 3 of the Seoul High Court convicted him of leaking Samsung’s DRAM process technology abroad in breach of the Act on Prevention of Divulgence and Protection of Industrial Technology, which carries heavier penalties for technologies the government designates as national core technologies. The leaked material included what the paper described as PRP, a core manufacturing recipe. The court said the offense caused irrecoverable damage to Samsung and threatened the country’s industrial competitiveness. A Seoul appeals court cut the former Samsung engineer’s sentence from seven years to five because he was not directly involved in development and admitted the charges. It also credited his testimony in related trials.
A second defendant, a former Samsung department head surnamed Kim who moved to CXMT in 2016, received six years and four months at a retrial. In an opinion piece, Asia Times wrote that prosecutors allege former Samsung staff helped CXMT reproduce Samsung’s 18-nanometer DRAM process, that some recruits received three to five times their previous pay, and that prosecutors estimated Samsung’s lost sales at about 5 trillion won in 2024. The same piece cited police data showing 18 of 33 overseas technology-leak cases detected in South Korea in 2025 involved China.
Seoul has also widened its legal tools. South Korea’s expanded espionage law took effect on September 13, 2026, extending offenses that once covered enemy states to foreign countries generally, Asia Times reported.
Expertise is hard to separate from secrets
Lawyers interviewed by CNBC described the same problem across jurisdictions: an engineer’s skill and a company’s secret often sit in the same head. "The difficulty is that often the trade secret is carried in the employee’s head," said Jezamine Fewins, head of litigation at Lewis Silkin in Hong Kong. Zechariah Chan, a partner at Lee & Lee in Singapore, said: "You cannot ‘take’ the information back after the engineer has become aware of it." Jamie J. Yang of Innovatus Law argued there is "very little chance that one person … will know enough to replicate that line."
Non-compete clauses offer limited cover. Samsung’s employment contracts include two-year non-competes, and a South Korean court in 2023 blocked a former DRAM researcher from joining Micron on that basis, CNBC reported, citing JoongAng Ilbo. Taiwan caps post-employment non-competes at two years and requires compensation of at least half the employee’s average monthly salary during the restricted period. Singapore and Hong Kong courts enforce such clauses only when they are reasonable and protect legitimate interests.
Taiwan has leaned on criminal law instead. Taiwanese authorities have investigated 166 cases of companies allegedly concealing ties to China over the past six years, and completed another 67 China-related trade-secret probes in the tech sector, Rest of World reported. On October 1, prosecutors indicted the head of the Taipei office of Hefei-based Lontium Semiconductor for allegedly running an unregistered office and hiring engineers for chip research, testing and technical services without authorization, Focus Taiwan reported. They sought an 18-month sentence.
Penalties are rising on both sides of the strait
Taiwan’s amended National Security Act now sets five to 12 years in prison and fines of up to NT$100 million for economic espionage involving nationally critical technologies, according to Asia Times. Taiwan is also weighing 10-year terms for unlicensed AI chip exports to China. In South Korea, the next test is a case announced by prosecutors on October 14 against three engineers accused of taking a testing-component maker’s probe-card designs to a Chinese employer that offered them roughly double their pay. Asia Times argued that Seoul should go after the companies that direct and finance such transfers, and the front companies, staffing firms and headhunters that recruit for them. Charges against a Chinese employer or recruiter, and not only the engineers it hires, would mark that shift.