CXMT Allegedly Carried Out Industrial Espionage Against Samsung to Speed Up Its Memory Development
A South Korean court revealed details of an alleged large-scale industrial espionage operation that helped CXMT become one of the most important Chinese DRAM memory manufacturers.
According to court documents, the company created a roadmap with specific goals to copy Samsung’s technology, an internal strategy known as the “Project Hefei.”
The plan was led in mid-2016 by CXMT’s head of development, who previously held a similar position at Samsung. The goal was not only to attract key engineers from the Korean company, but also to directly obtain Samsung’s Process Recipe Plan (PRP), a set of confidential data that describes a 620-step DRAM memory manufacturing process, including machinery, materials and production methods.
CXMT in Court for Alleged Spying on Samsung
CXMT initially tried to produce 18-nanometer memory based only on the memory of engineers recruited from Samsung. When they saw that this was not enough, they turned to the leaked original technical document. Using it as a base, they distributed an adapted version within the company, which contained terminology, development notes and machinery instructions exclusive to the South Korean company, Samsung.
This information leak allowed CXMT to go from having no research centers or experience in 2016 to producing memory wafers in just over two years, something that would be almost impossible through normal means. The economic consequences have been huge, as the Chinese company now controls around 10% of the global DRAM market and its revenue has risen sharply, breaking the historic total dominance of the trio made up of Samsung, SK Hynix and Micron.
While South Korean authorities are assessing damages to Samsung worth tens of billions of dollars and have already issued prison sentences to several of the former engineers involved, the story of the Hefei Project shows how one leak ended up changing the geopolitical and commercial balance of the entire semiconductor industry.
