The Hidden Threat of Foreign Direct Investment: 23 Trillion Won in Industrial Technology Leakage Over Five Years

110 Cases of Technology Leaked Overseas, Including Semiconductors
33 Involve National Core Technologies
FDI Security Review Threshold of 50% Exploited
Influence Exercised Through Minority Stake Investments
Systematic Improvements Neede

#1. China’s Great Wall Motors established a local subsidiary in Korea between 2019 and 2020, claiming to enter the battery business, but used it as a channel to steal technology. By pretending to conduct joint research with university-industry cooperation groups, they obtained battery blueprints and research materials from current and former employees of Samsung SDI and SK On. This technology was found to have been used in the construction of a factory in China, and in January 2024, the police arrested and referred five individuals involved to the prosecution.

#2. In 2021, a former employee of SEMES, a Samsung Electronics subsidiary that manufactures core semiconductor and display equipment, established a cleaning equipment company in Korea and developed equipment using technology leaked from his previous workplace. This individual was caught after supplying the equipment to the Korean subsidiary of a Chinese equipment company. He received 7.8 billion won in exchange for personnel and technology, and was apprehended by prosecutors while producing mass-production equipment using the stolen technology.

Foreign Direct Investment (FDI), which serves as a vital source of dynamism for Korean companies, is being exploited as a conduit for technology leakage. Technology is siphoned off under the guise of university-industry cooperation, or foreign investors exploit the 50% threshold in the national security review criteria by acquiring stakes below that level to exert influence over company management. The scale of damages from technology leakage through FDI has exceeded 20 trillion won over the past five years. As a result, there is growing demand to strengthen the national security review standards and revise the system during the FDI attraction process.

According to a report titled “Review of Measures to Improve the Foreign Investment Security Screening System,” released on the 14th by the Korea Economic Association and prepared by Professor Jo Sujeong of Korea University Law School, the scale of industrial damages caused by domestic technology leakage over the past five years (2020 to June 2025) amounts to approximately 23.27 trillion won. There were 110 cases of technology leakage overseas, of which 33 involved national core technologies. By sector, semiconductors accounted for the largest share (33%), followed by displays (20%) and electrical/electronics (8%). All of these are considered national strategic industries.

Private investment in advanced industries has been steadily expanding, thanks to FDI. In 2024, the R&D expenditure of Korea’s top 1,000 companies reached a record high of 83.6 trillion won.

However, as FDI increases, technology leakage is also rising. With diversification in investment methods-such as establishing joint ventures, minority stake investments, and overseas R&D centers-the number of weak links has also grown.

Within the business community, there is a growing call to heighten awareness of technology protection and to swiftly introduce institutional improvements and countermeasures. Lee Sangho, Head of the Economic and Industrial Division at the Korea Economic Association, suggested, “We must strengthen standards so that Korea does not become the weak link in the global supply chain, but at the same time, ensure that the operation is sophisticated enough not to undermine domestic companies’ partnerships.”