Alliance in Semiconductor Business
The cross-licensing agreement between Samsung Electronics and SK Hynix is the second one of its kind between Korean companies, following the other one signed 20 or so years ago between Samsung Display Devices and Goldstar. It is expected that the agreement at this time will be a boon to the semiconductor manufacturers’ global market leadership while having a positive effect on the ongoing patent negotiations between Samsung Display and LG Display. “The cross-licensing agreement is truly shocking news for the entire industry in that the two companies’ combined global market share is at over 60%,” said an industry insider.
Conclusion after Three Long Years
Their negotiations started by accident. The staff members in charge of patent management had a casual meeting with each other and happened to talk about patent sharing to result in working-level talks.
“The two giants’ opinions clashed in some cases during the past three years but they agreed in the end to conclude the contract in view of the fact that they have symbiotic relations in the industry,” said another source, adding, “All of the details of the negotiations are planned to remain confidential, which implies that the two built much trust with each other during the course.”
The agreement is likely to allow them to take a further advantageous position in the development of next-generation semiconductor technologies with the industry currently being led by three groups -Samsung Electronics; SK Hynix; Micron and Eplida -- as the scope of the contract is expected to be expanded to cover advanced semiconductor technologies.
As early as back in 2008, SK Hynix and Samsung Electronics had already signed a mutual agreement for the joint development of non-volatile memory products. They are still moving ahead with the goal and are likely to include this part in the cross-licensing contract. “Probably, the two companies will expand the scope of cooperation building on the mutual confidence,” said a securities market analyst. He continued, “It is expected that their past and future patents will also be covered by the agreement down the road.”
Positive Impact Expected on OLED Patent Negotiations between Samsung Electronics and LG Electronics
At the same time, the agreement is forecast to have a positive impact on the OLED patent negotiations between Samsung Electronics and LG Electronics. The predecessors of the two companies had agreed to share their 8,139 CRT- and LCD-related patents in 1992.
“Once the Korean corporations come to terms with each other regarding the cross-licensing of OLED display patents as well as semiconductor-related ones, foreign patent trolls’ aggressive stance cannot but lose steam,” an IT industry personnel pointed out, adding, “Such forms of cooperation have great significance in terms of the development of domestic industrial ecosystems and the creation of an advanced patent ecosystem here in Korea.”