The US House Select Committee on Strategic Competition with the Chinese Communist Party (Select Committee on the CCP) has urged a ban on importing OLED panels from BOE over alleged patent infringements against Samsung Display (SDC). Analysts suggest that such a ban could bolster South Korea's display industry, positioning SDC as the primary beneficiary.
ETNews reported that John Moolenaar, chair of the Select Committee on the CCP, called on the International Trade Commission (ITC) to prohibit the import of BOE OLED panels, citing infringements on SDC's patents.
Chosun Biz reported that in a December 19 letter to the ITC, Moolenaar warned that not banning BOE displays, proven to infringe US patents, could heighten US dependency on BOE for military-critical technologies. He further stressed that failing to sanction BOE risks signaling to Chinese firms that US intellectual property (IP) can be violated without consequence.
In September, Moolenaar called on the Ministry of National Defense to classify BOE as a Chinese military corporation, asserting that BOE plays a key role in China's military-civil fusion strategy and poses a potential threat to US national security. The Select Committee on the CCP recommended comprehensive measures to safeguard US national security, including restricting display imports from BOE and other Chinese manufacturers.
BOE, a major producer of LCD and OLED panels, has grown rapidly with strong support from the Chinese government. As Huawei's primary OLED panel supplier, BOE's technologies are vital for consumer electronics, such as TVs and smartphones, as well as military and defense applications.
Recap: SDC's ITC battle over OLED patent infringements
In December 2022, SDC filed an ITC complaint against US distributors for selling OLED panels that infringed its patents and sought an import ban. BOE, whose panels were implicated, voluntarily joined the case in March 2023 as a co-defendant with the importers.
SDC accused 17 US wholesalers, including MobileSentrix and Gadget Fix, of importing OLED panels that violated four patents, including Diamond Pixel (patents 9,818,803; 10,854,683; 7,414,599; 9,330,593), and sought a ban on these components.
The Elec reported that on November 15, 2024, the ITC issued a preliminary ruling, finding BOE guilty of infringing three SDC patents and US importers guilty of infringing four. However, the ruling, nearly two years after SDC's initial complaint, did not ban BOE's product imports.
Samsung's ongoing struggles with IP theft and rising competition from China
Since 2018, disputes between South Korea's Samsung and Chinese companies have centered on allegations of IP theft. CNN reports that Samsung's folding screen technology was stolen and sold to China, prompting the Suwon District Prosecutor's Office to charge 11 individuals. The accused allegedly leaked blueprints of Samsung's "flexible OLED edge panel 3D lamination" technology to a self-founded company, which sold the data to Chinese firms for nearly US$14 million.
As reported by The Verge and CNBC, Samsung debuted its Galaxy Fold, the company's first foldable smartphone, on February 20, 2019. Five days later, Huawei unveiled its 5G foldable phone, the Mate X, while Oppo's then-VP Yiren Shen revealed a foldable prototype on Weibo, sparking market speculation about the timing, according to Yahoo News.
RTI reports that employees of a Samsung supplier created a shell company to obtain equipment usage data and panel design details from SDC, later selling the stolen technology to Chinese firms. The supplier illicitly manufactured 24 units of 3D lamination equipment, selling 16 to Chinese buyers. Nikkei identified the recipients as BOE, TCL CSOT, and two additional Chinese panel manufacturers.
In May 2023, former Samsung executive Jin-seok Choi faced accusations of setting up a factory in China to steal proprietary data. By July, SDC had filed a federal lawsuit in Texas against BOE, alleging infringement of five OLED patents in the production of components for devices like the Apple iPhone 12, as reported by Reuters.
On July 18, 2024, a South Korean court sentenced a former SDC researcher to six years in prison for leaking OLED manufacturing technology to China, valued at over KRW340 billion (approx. US$234.4 million).
According to Businesskorea and Korea JoongAng Daily, the researcher, an OLED expert with over a decade at SDC, stole and shared trade secrets from 2018 to May 2020, including OLED Excimer Laser Annealing (ELA) equipment's inverted optical system and OCR inkjet technology. These actions underscore the growing threat of intellectual property theft in the tech industry.
Omdia reports that South Korea has traditionally led the chip and display manufacturing sectors, with SDC dominating the OLED market. However, BOE overtook LG Display (LGD) in 2022 to become the world's second-largest panel maker, intensifying competition for South Korean firms from Chinese manufacturers.
Potential impact of an ITC ban on BOE OLED panels
The ITC's decision on whether to follow the US House of Representatives' recommendation to ban BOE's OLED panels remains closely watched. As the patent dispute involves widely used electronic products, such a ban could have far-reaching consequences.
South Korean analysts argue that an import ban on BOE could limit Chinese firms' ability to supply OLED panels to the US and enhance their technology, providing a competitive edge to South Korean manufacturers.
