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‘Technology leakage,’ which has been intensively occurring in advanced industries such as semiconductors, is now showing signs of spreading across all fronts. For the first time, a technology leakage dispute has arisen in the wire and cable sector, which had previously seemed distant from such issues. Upon learning of this, the police have launched a full-scale investigation. The industry is closely monitoring the police investigation results and the potential ripple effects.
According to the wire and cable industry on the 17th, the Industrial Technology Security Investigation Unit of the Gyeonggi Southern Provincial Police Agency has booked and is investigating Architecture Office A on charges including violation of the Unfair Competition Prevention Act. This office had consecutively participated in the construction of factories for LS Cable & System and Dong-A Cable. According to the police, from 2008 to 2023, this office was responsible for the architectural design of LS Cable & System’s high-voltage submarine cable (HVDC) factory, and then took on the construction of Dong-A Cable’s first submarine cable factory, a competitor of LS Cable & System. The factory was completed and opened on the 3rd of this month. The police suspect that the office leaked submarine cable-related technologies secured during the design of LS Cable & System’s factory while designing Dong-A Cable’s factory.
‘Intensified Competition’ Wire and Cable Sector Now a Risk Zone
According to Asia Economy’s investigation, this is the first time a technology leakage dispute has occurred in the wire and cable sector. A review of technology leakage status by sector compiled by the National Intelligence Service and precedents from courts nationwide found no previous cases where technology leakage in the wire and cable sector caused problems. Most lawsuits in the wire and cable sector have been related to patent rights or claims for damages arising during business operations.
Depending on the police investigation process and results, it is expected to be confirmed that the wire and cable sector is no longer safe from technology leakage.
While the wire and cable sector was perceived as relatively distant from ‘technology leakage’ compared to semiconductors and shipbuilding, recent developments such as the advent of the artificial intelligence (AI) era, the emergence of new technologies with high power consumption, and the aging power infrastructure of advanced countries have created favorable conditions, intensifying competition. Consequently, the possibility of technology leakage between competing companies has increased.
The background of this case also points to the recent industry atmosphere of advanced technology and intensified competition. The case was triggered because the same architecture office was responsible for designing HVDC factories for competing companies. At first glance, one might wonder how architectural design, such as deciding the number of restrooms or rooms in a building, could lead to technology leakage, but the reality is different. The wire and cable sector’s technology is concentrated even in factory design. An industry insider said, "In the case of HVDC, cables can be made up to 80 km long, and the processes of coiling, storing, and transporting them to land each involve technology," adding, "During factory design, proceeding according to these processes could have exposed the relevant technologies."
Additionally, the competitive dynamics between LS Cable & System and Dong-A Cable also played a role in this case. LS Cable & System was the first to enter the submarine cable field, while Dong-A Cable was a latecomer. It is possible that LS Cable & System’s vigilance toward Dong-A Cable influenced this incident. The submarine cable sector has recently attracted attention as a field that the wire and cable industry must secure due to increasing demand for clean energy. This is because submarine cables can transport clean energy generated from offshore wind and tidal power to land. LS Cable & System began focusing on this field first, and Dong-A Cable entered the market somewhat later. In this process, from December 2022, Dong-A Cable started building its first submarine cable factory in Dangjin City, Chungcheongnam-do, and entrusted the design to Architecture Office A, which led to the issue.
Source: Office of Ahn Cheol-soo, People Power Party (National Intelligence Service 'Status of Overseas Leakage of National Core Technologies' Data)
No Existing Data "Need for Preparedness"
Although technology leakage cases are expected to continue occurring in the wire and cable sector, it remains uncertain whether related institutions can respond appropriately. Leading organizations that focus on technology leakage issues have almost no data related to technology leakage in the wire and cable sector. When Asia Economy inquired whether the Korea Industrial Technology Protection Association had any cases of technology leakage in the wire and cable sector, they replied, "We do not yet have any data related to the wire and cable sector."
Technology leakage in the wire and cable sector is more likely to occur domestically than overseas. Heightened awareness of overseas technology leakage in sectors like semiconductors has raised the threshold for technology outflow, and related systems have been relatively well implemented. In 2019, the Ministry of Trade, Industry and Energy designated the 500 kV and above ultra-high voltage power cable systems held by LS Cable & System and Dong-A Cable as national core technologies, completely blocking leakage channels. At that time, concerns arose that Dong-A Cable’s ultra-high voltage power cable technology might be transferred to China, a latecomer in the wire and cable market, amid speculation about Dong-A Cable’s possible sale overseas, including to China, prompting government action.
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