South Korean electronics giant Samsung Electronics has cut ties with BOE, China's largest display manufacturer. The decision comes as a result of patent infringement and trade secret theft allegations made by Samsung Display, a subsidiary of Samsung Electronics. Complaints have been filed with the U.S. International Trade Commission (ITC) accusing BOE of misappropriating OLED panel and module technology.
The exclusion of BOE from Samsung Electronics' supplier list is significant as the Chinese company has been a major supplier of LCD panels, accounting for approximately 10% of the company's TV panel purchases in the first half of 2023. This marks the first time in nearly seven and a half years that BOE has not been included as a primary supplier for Samsung Electronics' Device Experience (DX) division.
The termination of the partnership is expected to have a significant impact on BOE's business. As a major customer, Samsung's decision to end the contract will likely hurt the Chinese company's bottom line. BOE had been relying on Samsung as a key customer, and losing this contract will pose challenges for its operations.
In response to cutting ties with BOE, Samsung Electronics is anticipated to increase its collaboration with other suppliers such as LG Display, Sharp, and AUO. LG Display, in particular, is expected to boost production at its Guangzhou, China LCD factory. This move could lead to an increase in shipments from 9 million units in 2023 to 16 million units in 2024.
The severed ties between Samsung Electronics and BOE highlight the significance of intellectual property protection in the technology industry. Patent infringement and trade secret theft allegations can have severe consequences for companies involved, leading to the termination of partnerships and potential financial losses. As the industry continues to evolve, safeguarding intellectual property rights remains crucial for businesses to maintain their competitive edge.
