South Korean police nab China flash factory suspects

South Korean police have arrested seven men suspected of stealing flash memory technology from Hynix Semiconductor Inc. and planning to use it in their own factory in China.

“In May we got a tip from an unidentified caller in China about some people from Hynix trying to set up a plant there, so we gave that information to authorities and they conducted the investigation,” said Ahyoung Kim, a spokeswoman at Hynix, the world’s third-largest memory chip maker.

The seven men are all former employees of Hynix, she said.

The group allegedly stole NAND flash manufacturing technology valued at 624.5 billion South Korean won (US$600 million) from Hynix before they left the company, and had already established a company in the Cayman Islands to manage their Chinese operations.

Hynix estimates the technology took two years to develop.

On Friday, officers from South Korea’s National Intelligence Service nabbed five members of the group on board a plane at Incheon International Airport, before it took off for Singapore, according to an official at the Seoul District Prosecutors’ Office, which is handling the case. The men face charges including technology theft and industrial espionage, he said.

Authorities have collected fifteen CDs and an unspecified number of flash memory sticks loaded with Hynix chip production technology information from the group so far, Kim said.

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