A Shanghai court sentenced 14 former Huawei Technologies employees to jail for stealing chip-related business secrets from the company, the state-owned Securities Times newspaper reported on Saturday.
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According to the report, the Shanghai Third Intermediate People’s Court on July 28 sentenced 14 employees of Zunpai Communication Technology, a start-up founded by engineers from Huawei’s chip development unit HiSilicon, to jail terms of up to six years on top of financial penalties.
The court has not published the verdict on its website and it is not known whether the engineers will appeal the ruling. Huawei did not immediately reply to a request for comment.
The case sent shock waves through China’s semiconductor industry and highlighted the issue of intellectual property theft on the mainland.
According to the Securities Times report, Zhang Kun, a former researcher at HiSilicon, left Huawei in 2019 and founded Zunpai in March 2021 to develop Wi-fi communication chips. Zhang managed to persuade some of his former colleagues to join him at the start-up.
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Huawei Technologies quickly took action against Zunpai. According to a legal document published 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) worth of assets under Zunpai and its subsidiaries.