US ITC begins probe over Samsung’s alleged microchip patent violation

By Song Su-hyun

US protectionism threatens to spread to Korean chip industry following steel, home appliances

  • Published : Nov 5, 2017 - 15:51
  • Updated : Nov 6, 2017 - 13:58

US International Trade Commission has embarked on a probe into an alleged patent infringement by Samsung Electronics for its lucrative semiconductor business, it said Sunday, raising further concerns about the Trump Administration’s growing pressures on its major trade partner South Korea.

The probe was announced on Oct. 31 after US semiconductor packaging firm Tessera Advanced Technologies accused Samsung of violating patents regarding wafer level packaging.

Wafer level packaging is a technology that simplifies the packaging of wafers and reduces the volume of finished products.

Tessera asked the ITC to ban sales of Samsung chips and smartphones, tablet PCs and laptops that use the chips.

The company said the power management integrated circuits of the Galaxy S8 and Note 8 smartphones was a case of patent infringement.

On Sept. 28, Tessera sued Samsung and some affiliates for infringements of as many as 24 patents related to bonding, packaging and imaging technologies with the ITC, three federal state courts and some international tribunals.

The ITC is investigating two of the 24 patents alleged to have been violated. 

(Herald DB)

Under the US customs law, the ITC is authorized to order bans on imports of goods that are found to have infringed US patents.

In 2013, the authority banned imports of Samsung’s Galaxy S, S2, Nexus smartphones and Galaxy Tab, judging that the Korean tech titan violated Apple’s patents.

Samsung declined to comment on the issue, saying “We don’t have any comment to make on pending legal issues.”

“The fact that the ITC has begun to inspect the case tells that the US authority believes the petition has some reasonable ground,” said Junsok Yang, professor of economics at Catholic University of Korea. “Although the patent infringement is an issue between a company and another, once it is petitioned to the ITC, the Trump administration is very likely to use it a means to put more pressures on its trade partners.”

Another US chipmaker Netlist requested an ITC investigation into SK hynix on Oct. 31, accusing the second largest memory chipmaker in Korea of infringing two patents owned by the company regarding memory modules.

The ITC hasn’t yet decided to investigate SK hynix.

SK hynix has been in a legal battle with the US firm since last September. The Korean company believes it was an additional action by Netlist to win the case.

“US semiconductor-related businesses are increasingly monitoring Korean chipmakers these days due to our outstanding technologies and market influence,” said an industry insider.

Such moves in the US semiconductor industry reflect expanding protectionism in trade against US’ trade partners across industries ranging from steelmaking to consumer electronics.

A public hearing was held on Oct. 19 by the ITC in order to discuss imposition of safeguard restrictions on washers manufactured by Samsung and LG Electronics.

On Oct. 12, Whirlpool had asked the ITC for a punitive tariff of 50 percent on Samsung and LG’s washing machines and parts over the next three years, which the Korean firms responded to sensitively, rebutting Whirlpool’s claim, since the US was their largest market.

However, at the hearing, South Carolina Gov. Henry McMaster and other congressmen opposed the trade restriction on the Korean companies, saying it would only increase consumer prices, reduce consumer choices and constrict foreign investment in the US.

The ITC is set to hold a vote on its decision on Nov. 21 based on the discussion at the hearing, and make a written recommendation to President Donald Trump by Dec. 4. The White House will have six days to review the recommendation and make a final decision.

Korean steelmaker Posco was slapped with an 11.7 percent tariff on its cut-to-length plates by the US Department of Commerce in March, a penalty breaking down into a 7.39 percent anti-dumping tariff and a 4.31 percent countervailing duty.

Posco opened a special office in Washington, D.C., early this year to monitor moves in the US steel industry and government policies on trade.

“Export conditions to the US have been aggravated this year, but we are trying to maintain good relations with US customers,” an industry official.

By Song Su-hyun (