Last year, the amendment to the Industrial Technology Protection Law increased penalties for the leakage of national core technologies. However, critics argue that it is still inadequate to prevent leaks of key technologies in advanced industries such as semiconductors and displays. As competition in artificial intelligence (AI) semiconductors intensifies, the issue of technology leakage has become critical, impacting both corporate competitiveness and national security. There are calls for legislative reforms, including raising penalties and expanding the scope of espionage laws.
According to the National Assembly's information system, since the amendment to the Industrial Technology Protection Law took effect in July last year, two bills have been proposed to strengthen penalties for technology leakage crimes.
In February, Kim Won-yi, a member of the Democratic Party, introduced a bill that proposes to increase both prison sentences and fines for crimes related to the leakage and infringement of national core and industrial technologies. The aim is to enhance the severity of penalties considering the social impact of technology leakage crimes.
In June, Kim Nam-keun, also from the Democratic Party, proposed a bill to enhance the effectiveness of punitive damages. This bill aims to ensure that when technology leakage is recognized, damages are calculated at five times the actual loss, rather than the current maximum of five times the actual damages, thereby providing substantial relief and preventive effects for corporate losses.
This reflects a growing concern that the current legal framework is insufficient to address the rapidly increasing problem of advanced technology leaks. Although the proposed amendments raise the maximum fine for technology leakage to 6.5 billion won (approximately $5.5 million), critics point out that the average sentences remain low, failing to achieve the intended deterrent effect. In a situation where a single advanced technology can determine the competitiveness of an industry worth trillions of won, a prison sentence of just a few years is unlikely to deter the rising tide of technology leaks.
According to the Korea Employers Federation, the number of detected cases of key technology leaks abroad surged from nine in 2021 to 33 in 2025. Since 2020, the estimated economic damage to the country has reached 23 trillion won (approximately $19.3 billion).
The urgency in the industry has increased, particularly as Chinese memory companies actively recruit talent from Samsung and SK Hynix, rapidly narrowing the technology gap. A notable example is Changxin Memory Technologies (CXMT), which recently became the top company by market capitalization on China's Nasdaq-style STAR Market. CXMT has reportedly recruited key technical personnel from Samsung Electronics and acquired technology from SK Hynix during its development process.
Public sentiment also leans toward strengthening penalties. A recent survey conducted by the Korea Employers Federation found that 90.7% of respondents believe that penalties for those who leak core technologies abroad should be increased. Additionally, 92.5% of respondents indicated that the negative impact of core technology leaks on the economy is 'serious.'
There are also concerns that South Korea's penalties for technology leakage crimes are relatively low compared to other major technology-holding countries. For instance, in April, a South Korean court sentenced a former Samsung Electronics employee to six years and four months in prison for leaking core semiconductor technology to CXMT. In contrast, in Taiwan, a case involving the leakage of TSMC's trade secrets and core blueprints resulted in a maximum sentence of ten years.
Given the limitations of merely amending the Industrial Technology Protection Law, there are calls for a separate legal framework to address the leakage of national core technologies as a matter of economic security. Specifically, there are suggestions to expand the scope of espionage laws or to establish new legislation governing economic security crimes related to advanced technology leaks.
Ha Sang-woo, a director at the Korea Employers Federation, stated, "As a majority of the public views the leakage of core technologies abroad not just as a corporate issue but as a threat to national competitiveness and economic security, prompt institutional improvements are necessary. We need a robust legal framework for penalties against the leakage of core technologies as part of our economic security response."
* This article has been translated by AI.
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