Samsung Electronics and SK Hynix, the world’s top two memory chip makers, on Wednesday said they have signed a cross-licensing deal, significantly reducing the possibility of intellectual property feuds between the two.

The contract, which reportedly had been in progress for a couple of years, will allow them to share technology on semiconductors for an unspecified amount of time so they can spend more time and effort on technological advancement. The pair also will be able to form a united front against international competition and reduce their dependence on external patents.

Details, including the scope and duration of the deal, were not revealed.

The message underlying this vague but significant deal appeared to be geared more toward the overseas markets, rather than the domestic firms, industry watchers said.

“The latest deal made between the market leaders signals to other competitors in the world market that it’s time to end the patent wars and focus on technology development,” said Lee Sun-tae, an analyst from NH Investment and Securities.

He explained that his interpretation stems from the fact that Samsung and SK Hynix, which respectively account for 40 percent and 20 percent of the global market, have together led the semiconductor industry for more than 20 years without a single known legal dispute regarding patent infringement, meaning there had been no imminent reason to sign such a deal.

Other industry watchers predicted that the latest collaboration would hardly sit well in the international markets.

“The world’s top two memory suppliers have teamed up on technology patents. It most likely will not sit well with the rest of the world, especially the rivals who feel they are now up against one very powerful entity borne from the collaboration between Samsung and SK Hynix. These feelings may be exacerbated since it looks like there will be a huge memory demand next year,” said one observer, declining to be identified.

The two Korean chipmakers ― which are potential clients to each other ― tried to downplay these forecasts.

Lee Won-ho, a Samsung Electronics spokesman, said he hopes for the deal to “set a worthy precedent in the industry” for galvanizing companies into technological innovation, but declined to comment on what the deal means for the global markets.

Park Seong-ae, a spokeswoman for SK Hynix, said that the firm hopes the deal will “contribute toward further development in the local and global semiconductor industries.”

SK Hynix and Samsung have never been enmeshed in intellectual property lawsuits with each other, but each has fought with respective or coinciding rivals, such as with Micron and Rambus.

In all cases, the feuds were settled outside of court with a licensing deal. 


By Kim Ji-hyun and Kim Young-won
(jemmie@heraldcorp.com)
(wone0102@heraldcorp.com)