Photo Source: leiphone
Fourteen former Huawei employees have been sentenced and fined for stealing proprietary chip technology and using it to establish a rival company, Zunpai Communications.
The Shanghai Third Intermediate People’s Court issued its ruling on July 28, resulting in a total fine of 13.5 million yuan and prison sentences for the defendants.
The primary defendant, Zhang Kun, a former executive at Huawei’s chip subsidiary HiSilicon, received a six-year prison term and a 3-million-yuan fine. The other 13 defendants were sentenced to prison terms ranging from one to five years, with fines between 200,000 and 1.5 million yuan. Five will serve immediate jail time, while the remaining received suspended sentences.
Police investigation revealed that after leaving Huawei, Zhang Kun and his associates founded Zunpai Communications in early 2021 in Nanjing. The group lured former Huawei R&D employees to join the new company with promises of high salaries and equity shares. Before their resignation, the employees were instructed to steal sensitive chip technology from Huawei using methods such as copying files and taking screenshots. The stolen technology was then used in the design of Zunpai's chips, allowing the company to benefit from Huawei’s intellectual property.
An expert evaluation confirmed that 40 key technical points in the infringing chips were over 90% identical to Huawei's proprietary technology, constituting a substantial violation. This led to significant losses for Huawei, with damages calculated based on both the stolen technology’s development costs and its estimated market value.
The case also saw the Chinese government take swift action. In December 2023, Shanghai police arrested the 14 individuals involved in the theft. At the same time, authorities froze 95 million yuan worth of Zunpai’s assets.
Founded in 2021 and headquartered in Nanjing, Zunpai Communications specializes in semiconductor chips for smart home and business applications, particularly Wi-Fi 6 router chips. Between 2021 and 2023, the company secured multiple funding rounds from prominent investors. Xiaomi also participated in the financing but later clarified its involvement was purely financial, with no technical or managerial ties to Zunpai
