South Korea toughens laws to protect chip secrets from spies

By the Editorial Team · Saturday, September 12, 2026

South Korea has updated its espionage laws for the first time in over 70 years to impose harsher penalties and broaden the definition of "national secrets" in response to rising industrial espionage targeting its semiconductor industry. This change aims to better protect the semiconductor sector, which is critical to the economy and facing increasing technology theft, particularly from foreign entities like China.

South Korea has enacted new legislation aimed at strengthening protections against industrial espionage targeting its semiconductor sector, one of the country's most vital industries. The revised espionage laws, updated for the first time in over 70 years, expand legal definitions and increase penalties for those who steal "national secrets" on behalf of foreign entities. The changes take effect tomorrow and allow for prosecution as spies, with sentences of up to 30 years in prison.

Under the new framework, "national secrets" encompass non-public information whose disclosure could threaten national security, including in economic and scientific fields. Previously, South Korean law restricted espionage charges to individuals acting on behalf of an "enemy" state, which was effectively limited to North Korea. This amendment closes that gap, reflecting concerns over broader foreign intelligence threats.

The move comes amid growing apprehension in Seoul about technology leakage that could undermine South Korea’s semiconductor dominance. The industry has been a cornerstone of the country’s economy, accounting for more than 40 percent of exports in 2026 and playing a crucial role in the global artificial intelligence boom.

According to the Korean National Police Agency (KNPA), a record 33 cases of overseas technology leaks were identified last year, with more than half involving China. Semiconductors were the most frequently targeted sector. While major companies like Samsung Electronics and SK Hynix are at the forefront of technological advances, security risks extend across the industry’s complex supply chain. Smaller suppliers and component manufacturers, often with fewer resources to protect sensitive data, accounted for 86 percent of leak cases, the KNPA said.

One notable incident involved the arrest of a former employee from an SK Hynix supplier at Gimpo airport near Seoul as he attempted to leave for China with sensitive high-bandwidth memory chip packaging technology. Experts note that retired executives and senior engineers are particularly vulnerable to recruitment by foreign interests. Kwon Seok-joon, a semiconductor specialist at Sungkyunkwan University, explained that these recruits are often offered salaries two to three times higher than their previous pay, with hiring frequently mediated through shell companies or consulting firms based in Singapore, Taiwan, or Hong Kong.

The urgency of these measures is heightened by rapid progress among Chinese memory-chip manufacturers. CXMT, China’s leading DRAM producer, saw its revenue nearly increase ninefold in the first half of 2026. Market analysis firm TrendForce reported that CXMT’s share of global DRAM revenues rose from 7.6 percent in the first quarter to 9.5 percent in the second, compared with 39.4 percent for Samsung and 24.9 percent for SK Hynix.

In December, South Korean prosecutors indicted ten former Samsung employees on allegations of illegally transferring Samsung’s 18-nanometre DRAM technology to CXMT, underscoring the ongoing challenges in safeguarding advanced semiconductor innovations.

South Korea’s justice ministry and CXMT declined to comment on the new legislation and related investigations. The law’s passage was welcomed by Justice Minister Chung Sung-ho, who said it provides a “legal safety net” to protect the country's advanced technologies from leakage.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.