Ex-Huawei workers jailed for stealing chip-related secrets

A Shanghai court has sentenced 14 former Huawei employees to jail for stealing chip-related business secrets.

The group worked for Zunpai Communication Technology, a startup founded by former engineers from Huawei’s chip development unit, HiSilicon.

The Shanghai Third Intermediate People’s Court handed down jail terms of up to six years and imposed financial penalties on July 28.

Zhang Kun, a former HiSilicon researcher, left Huawei in 2019 and established Zunpai in 2021, recruiting several former colleagues.

In August 2023, Shanghai HiSilicon Technology, a Huawei subsidiary, applied to the Shanghai Intellectual Property Court to freeze 95 million yuan (US$13.1 million) in Zunpai’s assets.

The case has drawn attention to intellectual property issues in China’s semiconductor sector.

🔗 Source: South China Morning Post

🧠 Food for thought

1️⃣ Former accusers becoming victims highlights IP theft as industry-wide challenge

This case creates an unusual reversal where Huawei, previously accused of IP theft by the U.S. Department of Justice, now finds itself the victim of similar actions by its own former employees.

In 2019, the DOJ indicted Huawei for allegedly stealing trade secrets from T-Mobile, including offering bonuses to employees who successfully stole confidential information from competitors1.

Now Huawei faces the same challenge from within, with former HiSilicon employees taking chip-related secrets to start their competing company Zunpai.

This demonstrates how IP theft affects companies regardless of their position in the technology ecosystem, creating a cycle where today’s alleged perpetrators can become tomorrow’s victims.

The semiconductor industry’s high-value intellectual property and employee mobility between companies create persistent vulnerabilities that affect both established players and startups across different markets.

2️⃣ Employee departures represent critical IP security risks in tech sector

The Zunpai case follows a pattern where departing employees leverage inside knowledge to launch competing ventures, a risk that spans beyond China’s tech sector.