Daily Archives: December 1, 2012
In August, workers at Samsung Electronics (005930) in the South Korean city of Suwon swathed 60 next-generation televisions in bubble wrap and nailed them into wooden crates. Two weeks later, when the boxes were opened at a Berlin trade show, two TVs were missing. The 55-inch prototypes—each costing $10,000 and weighing about 43 pounds—featured breakthrough technology known as organic light-emitting diode displays, which make TVs thinner and help project brighter and sharper images. The suspects: corporate spies.
Thefts of TV sets, diagrams, and circuitry are on the rise, and that’s bad news for Samsung and LG Electronics—the only companies that can commercially produce OLED displays, which the $110 billion flat-screen TV industry expects to wow consumers and revive slumping sales. South Korea’s National Industrial Security Center, part of the country’s intelligence agency, last year reported 46 cases involving attempts to steal local companies’ secrets overseas, up from 32 in 2007.
While estimates of industrial espionage are hard to come by, South Korea says foreign theft of its corporate secrets resulted in about $82 billion in damages in 2008, the most recent data available, up from $26 billion in 2004. The Koreans say 60 percent of victims are small and midsize businesses, and half of all economic espionage originates in China, according to a 2011 U.S. congressional report. “Any company that has a competitive advantage or new technology will be targeted by industrial espionage,” says Frank Schurgers, managing director of security agency Integris International in Berlin.