South Korea Indicts Group for Leaking Samsung Display Tech to Chinese Firm

November 29, 2018 Updated: November 29, 2018

SEOUL—South Korean prosecutors on Nov. 29 said they have indicted nine people on suspicion of leaking Samsung Electronics Co., Ltd. flexible display technology to a Chinese company.

The Suwon District Prosecutors’ Office has charged the chief executive and eight employees of supplier Toptec Co., Ltd. for selling information earlier this year about Samsung’s organic light-emitting diode (OLED) panels.

The group is accused of forming a separate shell company that received information on the use of equipment and drawings of panels obtained from Samsung subsidiary Samsung Display, and sold some of the documents in China for 15.5 billion won ($13.85 million), the prosecutors office said.

Toptec, which produces automated equipment to make mobile phone display panels, denied any wrongdoing.

“Our company has never provided Samsung Display’s industrial technology or business secrets to a Chinese client. Our company will fully cooperate with legal proceedings to find the truth in court,” Toptec said in a statement.

Shares in Toptec tumbled 20 percent.

A Samsung Display spokesman said the indictment was “regrettable” and that the firm would increase efforts to protect technology.

Prosecutors said Samsung Display invested 150 billion won over six years to develop the leaked technology of 3D lamination, which they said was “a national core technology.”

Samsung dominates the market for small and mid-sized OLED displays and is a supplier of Apple Inc.

On June 27, South Korean prosecutors announced they had indicted seven individuals—six Korean nationals and one Chinese national—for violating South Korea’s Industrial Technology Protection Act while attempting to pass on core OLED technology to an unnamed Chinese OLED company, according to South Korean news site Aju News. Three individuals, including the Chinese national, were arrested and detained.

China’s OLED Ambition

China seeks to dominate the OLED industry by fair means or foul, but its domestic OLED industry is still limited. According to Aju News, none of the major smartphone makers around the world get their OLED supply from Chinese sources.

Chinese manufacturers also have not yet developed the technology to produce large OLED panels for TV screens.

As a result, Chinese companies have been dangling lucrative salaries for South Korean OLED professionals in an attempt to lure away talent who can accelerate China’s OLED development.

A June 8 article posted on the official website of China Semiconductor Industry Association (CSIA), a trade organization, reported that Samsung Display’s latest QD-OLED display—an enhanced OLED display using quantum-dot technology to produce more brightness and color accuracy—made it even harder for Chinese display-screen makers to catch up with Samsung and LG, another South Korean conglomerate that is a top maker of OLED products.

According to Aju News, Chinese companies have offered an annual salary of up to 500 million Korean won ($450,000) to senior South Korean professionals in the semiconductor and flat panel display fields, which is about three times higher than the average industry salary in South Korea.

Aju News also reported in June that three principal OLED researchers at Samsung Electronics, the parent company of Samsung Display, quit their jobs this year and took up jobs at BOE Technology, a Chinese OLED maker based in Beijing.

The Epoch Times contributed to this report.