In order to support and foster technologies important to Korea's economy and national security, Korea has enacted an Act on Special Measures for Strengthening and Protecting the Competitiveness of the National High-Tech Strategic Industry (the "Special Act"), that became effective on August 4, 2022. Under the Special Act, technologies that (i) have a significant impact on national and economic security, such as stabilization of the supply chain, and on the national economy, such as export and employment, (ii) have growth potential, technical difficulty and industrial importance, and (iii) have a significant ripple effect on related industries, including semiconductor, display, secondary battery, and bio industries, will be newly designated and protected as National High-Tech Strategic Technology ("NHST"). Companies that research, develop or commercialize NHST will receive government benefits and special support. However, companies having NHST will be subject to stringent requirements for protecting the NHST and additional regulations when exporting NHST. IP practitioners should stay alert to the changes regarding the Special Act, since NHST may be triggered during M&A deals or when technologies are assigned or licensed abroad.
1. Selection of National High-Tech Strategic Technologies
Recently, 17 NHSTs in four industrial sectors have been identified (which was confirmed by the Ministry of Trade, Industry and Energy (MOTIE) on June 2, 2023).
Many of the selected NHSTs overlap with the National Core Technologies (which are also technologies designated by the Korean government as being important to the Korean economy) under the Act on Prevention of Divulgence and Protection of Industrial Technology (the "Industrial Technology Act" or "ITA") but with different technology specifications. In most cases, the technical level required for NHSTs are higher than those for national core technologies. In addition, new display and bio industry technologies were added to the list, as shown below (newly added technologies are shaded in grey).
| Category | Technology |
| Semiconductor (8) | Design, process, and device technology & 3D stack formation technology applicable to DRAM of 16 nm or less |
| Stack assembly technology & inspection technology applicable to DRAM of 16 nm or less | |
| Design, process, and device technology applicable to 3D NAND Flash of 128 or more layers | |
| Stack assembly technology & inspection technology applicable to 3D NAND Flash of 128 or more layers | |
| Image sensor design, process, and device technology for 0.8㎛ or smaller pixels | |
| OLED display driver IC design technology for display panel operation | |
| Process and device technology & 3D stack formation technology applicable to Foundry of 14 nm or less | |
| Process, assembly, and inspection technology applicable to high-tech packages for system semiconductors, such as FO-WLP, FO-PLP, FO-PoP, or SiP | |
| Display (4) | AMOLED panel design, manufacturing, process, and operation technology (ultra-small size of 3,000 ppi or more, small size of 500 ppi or more, mid-size of FHD or more, large display of 4K or more, excluding module process technology) |
| Design, manufacturing, process, and operation technology for panels made of eco-friendly QD with a half width of 40 nm or less (color reproduction rate of 90% or more under REC2020, excluding LCD and module technology) | |
| Design, manufacturing, process, and operation technology using micro LED display panel of 30㎛ or less (ultra-large chip size of 30μm or less, mobile chip size of 20μm or less, ultra-small chip size of 5μm or less) | |
| Design, manufacturing, process, and operation technology for nano LED display panel of 1㎛ or less (excluding module technology) | |
| Secondary battery (3) | Technology for design, process, manufacturing, and evaluation of high energy density lithium secondary batteries (pouch-type batteries with an energy density of 280Wh/kg or more, prismatic batteries with an energy density of 252Wh/kg or more, cylindrical batteries with a diameter of 21mm or less with an energy density of 280Wh/kg or more, and cylindrical batteries with a diameter exceeding 21mm with an energy density of 260Wh/kg or more) |
| Technology for design, manufacturing, and process of high-capacity anode materials for lithium secondary batteries (containing over 80% nickel) | |
| Design, process, manufacturing and evaluation technology for ultra-high-performance electrodes (silicon graphite composite anode, sulfur cathode, lithium metal anode) of 600 mAh/g or higher or next-generation lithium secondary batteries (all-solid-state batteries, lithium-sulfur batteries, lithium metal batteries) | |
| Bio (2) | Animal cell culture and purification technology applied to the development and manufacture of biopharmaceuticals (multi-use bioreactor cell culture: 10,000 liters or more) |
| Organoid differentiation and culture techniques applied to develop and manufacture high-quality organoid regenerative agents (scale of culture of autologous and homologous organoid regenerative agents: 100 dose/lot or more, organoid target cell composition by organ: 80% or more, organoid survival by organ: 80% or more) |
2. Regulations for National High-Tech Strategic Technologies
Pursuant to the Special Act, NHSTs are subject to the following regulations:
Regulation of Export and Overseas M&A
A holder of NHST must obtain approval from MOTIE if the holder (i) intends to export the technology to a foreign company by sale, transfer, or other means or (ii) intends to proceed with an overseas acquisition, merger, joint venture, etc. Assigning intellectual property rights that fall within NHSTs abroad or granting licenses to such IP rights to foreign companies, transferring materials relating to such technologies overseas for the purpose of legal proceedings (e.g., patent infringement suits) before the court or the International Trade Commission, or granting a foreign company's access to such technologies stored in a cloud service may all constitute "export" for the purpose of the Special Act. However, export of materials, parts, devices themselves and mere provision of the information that commonly accompanies such export, without details that would allow implementation of national high-tech strategic technology, are not required to obtain approval.
Protective Measures
The Special Act requires NHST holders to take protective measures to prevent the leakage of NHSTs by, e.g., (i) designating protected areas under access control and inspecting personal belongings at entrances and exits, and (ii) keeping track of the movement of employees handling NHSTs and ensuring they have executed non-disclosure agreements. Please keep in mind, however, that protective measure requirements may continue to evolve.
With the scope of NHSTs now specified, companies possessing relevant technologies should carefully review whether appropriate safeguards and procedures have been implemented.
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