Business

Samsung goes to insane lengths to stop China from stealing its secrets

Corporate espionage is a real threat to successful businesses like Samsung. They have to make sure that their trade secrets remain protected from their competitors who would like nothing more than to bring them down. These secrets are what provide these companies with their competitive edge.

If they fall into the wrong hands, the company may quickly find itself in a battle for its survival. The larger a company, the more employees it has, and they’re often the weakest link that competitors exploit. Samsung is all too familiar with these challenges which is why it goes to some insane lengths to prevent its trade secrets from leaking.

South Korea’s intelligence is also on Samsung’s side

There are widely reported cases in which Samsung employees were arrested on charges of leaking confidential information. A senior Samsung official from its semiconductor division was arrested in 2016 for trying to sell information about Samsung’s 14nm and 10nm fabrication processes to Chinese competitors.

A more recent example is that of two senior Samsung Display researchers who were arrested in August 2020 on charges of trying to leak Samsung’s OLED panel production technology to China. OLED displays are a big business for Samsung. It wouldn’t want those trade secrets leaking out, especially to the Chinese, who have been trying to establish themselves in the OLED market.

That case is currently under trial. A report from Nikkei reveals the extraordinary lengths that Samsung goes to in order to prevent employees from leaking information. The South Korean government also takes an interest in the matter. It has classified technologies related to OLED panels as “national core technologies.” Its agencies work to ensure that no trade secrets leave the country.

Protecting the industrial secrets of its biggest companies is a matter of great importance for Seoul. The report mentions that the investigation that actually led to the arrest of these Samsung Display employees began after a secret inspection by the National Intelligence Service, South Korea’s top intelligence agency.

According to the report, Samsung disables the camera and audio recording features of its employees’ smartphones when they’re in its labs and factories. Even the printing paper used in copying machines at one laboratory has a metal foil in it. This foil is part of a detection system that’s meant to prevent employees from copying sensitive information and taking it out of the lab. If anyone tries to leave the building with this paper, an alarm will go off.

What Samsung can’t prevent, though, is employees willingly leaving the company to work anywhere else in the world, even China. There’s no law in South Korea that prevents employees of a company from actively seeking other employment opportunities. This is something that the Chinese are well aware of.

They advertise on job portals in South Korea and mention “favorable treatment” for employees that have worked in Samsung and LG. They’re given higher salaries and benefits so that they may switch jobs. BOE is now believed to have more than 50 former Samsung engineers working on the OLED panels it is developing for Apple. Samsung is currently one of the biggest suppliers of OLED panels to Apple.

Those who do switch over to a Chinese company are generally frowned upon in South Korea. They often use different names so that they’re not tracked by their former employers or the authorities in South Korea. If they have to return home, they prefer traveling via Hong Kong or Shanghai.

It’s a cat and mouse game that Samsung must play with the many competitors that want to put a dent in its business. Setbacks are unlikely to reduce their attempts. One thing is for certain, Samsung is never going to let its guard down.

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