Casual Email Demands for Technical Data... Semics Fined 36 Million Won for Violating Subcontracting Act

Requested three technical documents, including semiconductor inspection equipment drawings, but omitted the required statutory written form
"For client maintenance and repair" excuse does not hold up

The Fair Trade Commission has ruled that it is clearly illegal not to provide the statutory written document when requesting technical data from subcontractors, even if there is a legitimate reason. The Commission decided to impose sanctions on Semics, a semiconductor inspection equipment manufacturer, for requesting component drawings and other materials from a subcontractor without providing the required written document.

The Fair Trade Commission announced on the 22nd that it had uncovered that Semics, when outsourcing the manufacture and modification of temperature control devices (prober chillers) for semiconductor inspection equipment to a subcontractor, requested three types of technical data by email, including piping diagrams and parts lists, and decided to issue a corrective order and impose an administrative fine of 36 million won.

According to the Fair Trade Commission, under Article 12-3(2) of the Act on the Fairness of Subcontracting Transactions, even when technical data is requested for a legitimate reason, a written document must be provided in advance that includes the purpose of the request, the ownership of rights, the consideration, and the method of confidentiality protection. However, Semics completely ignored this statutory written procedure, merely claiming that the data was needed for client maintenance and repair requests or for performance evaluation.

This case is seen as reflecting the Commission's determination to eradicate the practice of indiscriminate requests for technical data, which can be abused as a preliminary step to technology theft. The technical data in question are key assets that the subcontractor has independently kept confidential, such as piping connection status and component specifications; obtaining them would confer a technological advantage by significantly reducing time and costs. The Fair Trade Commission pointed out that Semics did not even conduct proper consultations with the subcontractor regarding the purpose of the technical data request or the consideration.

The Fair Trade Commission stated, "This case is significant in that sanctions were imposed for failure to provide written documents when requesting technical data, even though it involved only a small number of technical data (three items) and transactions between small and medium-sized enterprises," adding, "We will continue to closely monitor not only acts of technical misappropriation but also procedural violations that could potentially lead to such acts, in order to block any possibility of technical misappropriation at the source."