[News] South Korea Expands Espionage Law to Combat Chip Tech Leaks; China Led Overseas Cases at 54.5%

South Korea has broadened its espionage law as it steps up efforts to protect advanced technologies from overseas leaks. According to Edaily, citing Reuters, the revised Criminal Act took effect on Sept. 13, expanding the scope of espionage offenses beyond North Korea to cover foreign countries and equivalent organizations. The change is intended to close a legal loophole that had made it difficult to bring espionage charges in cases involving the transfer of advanced industrial technologies, including semiconductor, to countries such as China.

Under the revised law, espionage conducted on behalf of a foreign country or an equivalent organization carries a minimum prison sentence of three years. A series of recent cases involving alleged leaks of advanced semiconductor technology has added urgency to the issue. As the report notes, prosecutors last year indicted five former Samsung Electronics employees on charges of transferring key DRAM tech to Chinese memory chipmaker.

Taiwan, home to TSMC, made economic espionage a crime in 2022, with legislation specifically targeting technology transfers to China, Bloomberg adds.

Revised Law Still Faces Limits in Technology Leak Cases

Still, critics say the revised law may not go far enough to prevent industrial technology leaks. According to Aju News, information designated as national core technology does not automatically qualify as a state secret under the Criminal Act. Legal experts cited by the outlet say espionage charges require the leaked information to qualify as a state secret, along with other conditions, including evidence that the suspect acted under the direction or instigation of, or was in communication with, a foreign party.

The issue is particularly significant given the number of technology leaks involving overseas transfers. Aju News notes that of the 179 cases detected by police last year, 33 involved overseas transfers, with China accounting for 18, or 54.5%. By sector, semiconductors accounted for five cases, followed by displays with four and secondary batteries with three.

Bloomberg also notes that while major companies typically have in-house risk management teams to detect leaks and build evidence for criminal cases, smaller downstream suppliers often lack the resources for extensive security controls, leaving them more vulnerable. More than 85% of technology leaks between 2020 and 2024 affected small and medium-sized businesses, according to data from South Korean lawmaker Choi Soo-jin’s office.

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(Photo credit: Samsung)