South Korea charged nine people and two companies of illegally selling Samsung's bendable screen technology to a Chinese rival.
Samsung is the market leader for smartphone- and tablet-sized OLED displays. Its display-making arm claims it invested over $134 million to fun a 38-strong team of engineers over six years in order to develop the technology. Three of them are now arrested and await trial while the list includes the company's CEO too.
The group allegedly sold Samsung Display IP to an unnamed Chinese company for around $13.8 million. The defendants are alleged to have established a shell company to conduct their transgressions which sold the drawings and other technical documentation in question for the equivalent of some $13.8 million. The illegal technology transfer occurred between May and August of this year.
Samsung will soon be launching a foldable smartphone and will use the display that was showcased recently. The charge was done at the Suwon District Prosecutors office. Still, the technology leakage that already occurred is likely to have a significant negative impact on South Korea's display industry.
South Korea charges 9 people with selling Samsung secrets to China
Prior to the emergence of trade secret theft allegations, Toptec was struggling to calm investors who were vary of the firm's lack of investments and a declining revenue.
Another company that is believed to have benefited from the leak is China Star Optoelectronics Technology, the No. 2 display panel maker in China at present.
Samsung Display responded to the news, saying that it's "shocked at the results of the investigation by prosecutors, at a time when competitors are intensifying their technological rivalry". Our company will fully cooperate with legal proceedings to find the truth in court.' Of course, Samsung said the incident has spurred the company to beef up security around its technology and secrets. Samsung makes its own displays, while Huawei is sourcing them from Chinese manufacturer BOE.