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South Korea has indicted nine people and two companies for illegally selling Samsung Electronics Co.'s collapsible screen technology to a Chinese rival.
The CEO of a Samsung supplier and eight of its employees received 15.5 billion won ($ 13.8 million) after conspiring with two representatives of the Chinese company to transfer the know-how of the Organic light-emitting diodes, according to a statement from the Suwon prosecutor. The names of companies and individuals have not been revealed.
Intellectual property theft is a national concern for South Korea, which is striving to maintain its increasingly narrow technological edge over China. The continent is investing billions to become autonomous in areas such as memory chips and displays, two areas in which Samsung is the world leader. OLED screens with curved contours have become a hallmark of Galaxy's high-end Galaxy smartphones from Suwon, including Note 9.
The United States is also concerned about what it sees as a state-sponsored technology theft campaign by China. Earlier this year, a former Apple Inc. engineer was arrested in the United States for stealing driverless car secrets. Earlier this month, Fujian Jinhua Integrated Circuit Co. and United Microelectronics Corp. of Taiwan have been charged with conspiracy against the trade secret of Micron Technology Inc.
In a statement, Samsung Display said that it was "shocked by the results of the prosecutors' investigation, at a time when competitors are intensifying their technological rivalry," adding that it would closely monitor the trial .
The South Korean supplier has transferred the "3D Laminating" technology and other equipment to the Chinese manufacturer of screens between May and August, in violation of a non-disclosure agreement with Samsung, according to prosecutors. They were arrested while they were loading additional pieces on a ship bound for the mainland, they said.
Prosecutors said the vendor had sold the technology after the decline in sales and that the CEO had created a fake company run by his sister-in-law. They accused him of having built the equipment in another factory in order to conceal the alleged conspiracy.
Samsung has spent about 150 billion won over a six-year period to develop OLED technology which is now considered a highly ranked national knowledge, said the prosecution. Samsung plans to release at least two versions of the upcoming Galaxy S10 with curved screens next year, Bloomberg News announced last month.
By Sam Kim
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