Statement on 'Technology Leak'... LS Cable & System "Massive Damage" vs. Daehan Cable "Not a Suspect"

Police Investigate Architectural Office
LS "Legal Action If Violations Confirmed"
Daehan Emphasizes "Already Possesses Related Technology"

LS Cable & System and Taihan Electric Wire, which were suspected of 'technology leakage' after the same architectural firm was in charge of the architectural design of the submarine cable factory, have expressed their positions for the first time since the police investigation began.

According to the industry on the 14th, LS Cable & System and Taihan Electric Wire released explanatory materials and statements regarding this incident, explaining each company's position and the current situation.

LS Cable & System revealed the issues and damage related to the technology leakage case. Regarding the submarine cable factory structure, they stated, "The structure and equipment layout are generally not publicly disclosed information, and five overseas companies also manage them as core technologies," adding, "While the design of the factory exterior can be done by any general architectural firm, the design of a submarine cable factory includes the load, layout, and quantity of special equipment, so if a competitor's factory is designed, there is a risk of technology leakage."

Regarding the architectural firm under police investigation, they explained, "It is the company responsible for the architectural design of LS Cable & System's submarine cable factories (Buildings 1 to 4) from 2008 to 2023," and "This architectural firm knows all the history and know-how about how each LS Cable & System factory overcame failures and improved efficiency through changes and development."

On the possibility that the architectural firm handed over technical data to the competitor Taihan Electric Wire, they said, "Since the investigation is ongoing, detailed information is not available, but we take the fact that they did business with a competitor very seriously and will closely monitor the investigation situation." Regarding criticism that LS Cable & System was negligent in data management, they stated, "Key equipment is designed and self-manufactured by LS Cable & System, and only the equipment manufacturers and the architectural firm know about it," adding, "LS Cable & System specified confidentiality obligations in the contract with the architectural firm and emphasized that all materials generated during the service process are confidential."

Regarding the scale of the damage, they said, "LS Cable & System has invested about 1 trillion KRW over approximately 20 years in submarine cable factories and research & development (R&D), so if technology leakage is true, the damage would be enormous and difficult to recover from," and "If illegal activities are confirmed in the future, we plan to take civil and criminal legal actions against the related companies."

Taihan Electric Wire also clarified the technology leakage allegations in a statement. They emphasized, "Taihan Electric Wire has never been identified as a suspect or received any related notification regarding technology leakage charges," and "The search and seizure of the on-site office of the submarine cable factory was to prove the charges against the architectural firm, which is the suspect."

They further explained, "The company was selected among many architectural design firms through a fair competitive bidding process," and "The selected firm is a company that performs design documentation services for buildings and utilities and did not engage in cable equipment or manufacturing technology work."

Regarding Submarine Factory 1, which the architectural firm is known to have designed, they said, "The factory layout was designed and arranged by incorporating the technical know-how accumulated since producing submarine cables after 2016," adding, "For Factory 2, which will produce high-voltage submarine cables and high-voltage direct current (HVDC) cables, the site has not yet been finalized, so design documents have not been prepared, and we plan to purchase and utilize the program of M Company, the largest cable equipment manufacturer in Europe (engineering services related to cable production equipment layout)."

Taihan Electric Wire also stated, "We expect an investment of about 940 billion KRW and are accelerating the construction of Factories 1 and 2," and "We have also completed the submarine cable laying vessel and are making every effort with all employees to provide total solutions in all fields of production and construction. This is to enhance the company's corporate and shareholder value as well as contribute to expanding the nation's industrial competitiveness."

Meanwhile, the Industrial Technology Security Investigation Unit of the Gyeonggi Nambu Provincial Police Agency has booked Architectural Firm A on charges including violation of the Unfair Competition Prevention Act and is investigating. The firm was responsible for the architectural design of LS Cable & System's HVDC factory from 2008 to 2023 and later participated in the construction of Taihan Electric Wire's Submarine Cable Factory 1, a competitor of LS Cable & System. This factory was built in the Godeok District of Asan National Industrial Complex, Dangjin City, Chungnam Province, and began operation on the 3rd. The police suspect that the architectural firm leaked submarine cable-related technologies secured while designing LS Cable & System's factory during the design process of Taihan Electric Wire's factory.