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Posted : 2012-06-27 20:33
Updated : 2012-06-27 20:33

Samsung, LG lose secret panel knowhow

By Kim Rahn

Key display panel production technology of Samsung and LG has been leaked overseas through a subcontractor, presumably to a Chinese display giant.

The Seoul Central District Prosecutors’ Office arrested and indicted three Korean workers at the Korean branch of Orbotech, an Israel-based company supplying display testing equipment, Wednesday, on charges of leaking the technologies of Samsung Mobile Display and LG Display.

The technologies were for Samsung’s active-matrix organic light-emitting diode (AMOLED) and LG’s White-OLED (WOLED) displays, including circuit diagrams. They are designated core national industrial technology according to the law on industrial technology leak prevention and protection.

Prosecutors charged another three employees of the subcontractor without physical detention on the same charges. The six were also charged with violating a contractual agreement with Samsung and LG to keep any secrets obtained through business.

Orbotech’s Korean branch was also indicted.

The workers, including a 36-year-old Kim, allegedly stole the technology, including that for 55-inch television production, by saving it on USBs that looked like credit cards on several occasions between November and January.

“While checking the testing equipment at Samsung and LG’s panel production lines, they filmed the diagrams for 55-inch televisions, which aren’t on the market yet. They then saved the information on the USBs, which they hid in their shoes, belts or wallets,” a prosecutor said.

They allegedly delivered the technology to employees of Orbotech’s Israel headquarters and its branches in China and Taiwan.

“It is very likely that rival foreign companies have obtained the technologies through the subcontractor. We expect a great economic blow to the nation, and the leak may cause a huge change in the international market share in the display industry,” the prosecutor said.

Prosecutors confirmed Kim, who previously worked at China’s biggest display panel producer BOE, handed over the technology to the Chinese firm through a worker of Orbotech’s China branch.

Samsung and LG have taken the lead in the international AMOLED market. The two companies have invested some 1.3 trillion won and 1.2 trillion won, respectively, in developing the technology in question.

They expect the damage will be tens of trillions of won, considering the losses they would incur by losing market share.

“The leaked information is the two firms’ confidential material and the nation’s core technology, and the technology gap between the Korean firms and overseas rivals could be narrowed in a short time,” the prosecutor said.

The prosecution plans to continue investigating workers from Orbotech’s headquarters and other overseas branches to prevent further leaks.

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