South Korea tightens espionage law to protect chip technology

South Korea is set to tighten its industrial espionage laws this weekend, with the changes aimed primarily at protecting advanced semiconductor technologies developed by Samsung Electronics and SK Hynix from Chinese competitors, Bloomberg reports.

The revised legislation introduces tougher measures against the disclosure of commercial secrets abroad. South Korea has already imposed increasingly severe penalties on former semiconductor industry employees accused of leaking sensitive technologies, but courts have been constrained by a narrow legal definition of espionage that applied only to individuals working for North Korean intelligence.

Although China is not explicitly named in the revised law, police data indicate that Chinese entities were linked to half of all detected cases of technology leaks abroad last year.

Government and industry reports have also raised concerns over the growing presence of Chinese chipmakers CXMT Corp. and Yangtze Memory Technologies in the global memory-chip market. The companies are rapidly expanding their market share and could potentially challenge South Korea’s dominant position in the sector.

The concerns have been heightened by a high-profile trial in Seoul involving 10 former Samsung employees accused of providing technology to CXMT. The alleged transfer of technology reportedly resulted in Samsung losing 5 trillion won ($3.7 billion) in sales in 2024.

According to Counterpoint Research, CXMT’s share of the global DRAM market reached 10% in the second quarter of 2026. Following a successful initial public offering in July, CXMT also became the largest Chinese company listed on a mainland stock exchange.

Samsung Electronics and SK Hynix currently control around 38% and 25% of the global DRAM market, respectively.

By Vugar Khalilov