Former DSME Employee Allegedly Leaked Submarine Secrets to Taiwan

South Korea has charged two people including a former employee of Daewoo Shipbuilding & Marine Engineering (DSME) for their involvement in leaking details and blueprints of its submarines to Taiwan. Media reports are that a consulting firm set up by the former DSME employee and a former officer from the South Korean Navy is also under investigation for not preventing the leak of the blueprints of the submarines.

The timing for the leak of the information was not revealed and has been at the center of a controversy over when it was first discovered and DSME’s awareness of the incident. Media reports suggested that the company only became aware of the leak last year, but Hanwha Ocean, which acquired DSME in 2023, told the Korea JoongAng Daily that the shipyard was aware of the leak since 2019 and has been cooperating with the investigation.

According to the report, the two individuals are being charged for violating the Foreign Act and Trade Secret Protection Act. They are believed to have first supplied details about the DSME 1400 submarine to Taiwan while they were working for the shipyard. One individual later helped to start the independent consulting firm which was working with Korea’s submarine programs and while at the firm provided additional information to Taiwan. According to the allegations, the information was supplied to CSBC, Taiwan’s state-owned shipbuilder.

South Korea maintains a balancing act in its relationship with Taiwan. They have a careful approach in order not to anger Beijing and its relationship with mainland China. 

The incident involved the 1400 a submarine design developed by DSME as an improvement on a diesel-electric attack submarine initially developed by Howaldtswerke-Deutsche Werft (HDW) of Germany for South Korea. The initial design was developed in the late 1980s and HDW sold it to South Korea building the first submarines and then consulting with DSME for the construction of additional vessels. South Korea commissioned a total of nine of the submarines between 1993 and 2001. DSME later built three additional submarines sold to Indonesia between 2017 and 2019.

Taiwan launched a program in 2016 to develop a domestic design for submarines. In September 2023, Taiwan christened its first new domestically-built submarine as part of a program that reported will see three submarines built to replace badly outdated vessels in its fleet.

The Korean Economic Daily in an exclusive report on the case indicates that it is not the first time the unnamed consulting firm has faced charges for its involvement in the leak of trade secrets. The firm and one of its executives, the newspaper reports, were sentenced last year in a case involving other parts for the Taiwan submarine program.

Hanwha in its statement emphasized that the incident occurred in the past when the shipyard was managed by Daewoo. DSME and the submarine programs were the target of cyberattacks which were believed to also be seeking data on the submarines and their designs. In 2016 and again in 2021, it was alleged that the shipyard was the victim of three cyber attacks which were associated with North Korea. It was unclear from the public reporting if any of the attacks were successful in breaching the sensitive data on the submarines.