Employees of a U.S. based-semiconductor equipment firm have been arrested on suspicion of leaking technology developed by Samsung to rival Hynix over the past several years, the Yonhap News Agency reported today. The Seoul Dongbu District Prosecutor's Office said they have arrested two employees at AKM Semiconductor - its vice president and a representative lawyer - and have booked 10 others without physical detention for leaking Samsung's trade secrets and memory chip making process beginning in March 2005.

The employees under investigation were known to have in therir hands classified documents from Samsung employees while frequently visiting the company's factory to install and maintain equipment, prosecutors said.

The U.S-based firm is under contract with both Samsung and Hynix to provide semiconductor equipment.

The alleged leaks include Samsung?s manufacturing process of DRAM and NAND flash memory chips as well as its investment plan for next generation chip production.

Prosecutors said they also arrested a senior-executive of Hynix and a director of Samsung, and are questioning employees from the two chipmakers over their involvement in the leak.

Both Samsung and Hynix expressed concern about technology leakage following the prosecution's announcement of the investigation.