Semiconductor equipment firm Applied Materials, Inc. (AMAT) in its 8-K filing said that Seoul Prosecutor's Office has indicted and arrested some of its employees in connection with an investigation into the alleged leakage of technology developed by Samsung through Applied employees to Hynix. Applied is in contract with both Samsung and Hynix to provide semiconductor equipment.
Reports said that Applied's Vice President and a representative lawyer were arrested by the prosecutors. Ten other Applied employees have also been indicted for the alleged leak. Further, according to reports, a senior-executive of Hynix and a director of Samsung were arrested by Korean authorities.
Media reports said that, during their visit to Samsung's factory for installations and maintainence of equipment, Applied's employees stole classified documents and got technology related information from Samsung employees.
According to prosecutors, the leaks include Samsung's manufacturing process of DRAM and NAND flash memory chips as well as its investment plan for next generation chip production.
In response to the allegations, Applied said that there are meritorious defenses to the charges. Applied added that it has strict policies in place to protect the intellectual property of its customers, suppliers, competitors and other third parties, and takes any violation of these policies seriously.
Wednesday, AMAT closed at $12.28, down $0.23 or 1.84% on a volume of 32.82 million shares on the Nasdaq.
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