Samsung isn't just competing with Chinese companies in the smartphone market. Chinese component manufacturers are also eyeing the Korean giant's lead in this market. Samsung has been able to retain its dominance largely due to its greater technological prowess and scalability. The protection of Samsung's intellectual property is, therefore, key to its very survival.
Its lead in the market is no laughing matter. Samsung Display has a near monopoly in the small to mid-sized OLED segment as it supplies over 95 percent of all panels. It contributes a significant chunk of the conglomerate's revenues. Even Chinese smartphone manufacturers have been using Samsung's OLED panels in their flagship smartphones. That's because the OLED technology of Chinese panel manufacturers still has a lot of catching up to do with Samsung's technology.
Vendor's employees were leaking Samsung's OLED secrets to China
Prosecutors in South Korea have indicted 11 people for leaking Samsung's OLED technology to China. They're the employees of a vendor that apparently produced automated equipment used for manufacturing OLED panels. They have been indicted on charges of leaking Samsung Display's 3D Lamination technology for curved OLED panels. Three of the 11 people indicted have been arrested and now await trial. The list includes the company's CEO as well.
They had allegedly set up a shell company to which they sent the information received from working with Samsung about equipment and drawings of the display panels. The trade secrets were then sold to an undisclosed Chinese buyer for approximately $14 million. Secondary names, phones, and personal email addresses were used to avoid being caught even as they violated a non-disclosure agreement signed with Samsung.
Samsung will certainly not be letting this go. The technology that was leaked reportedly took Samsung Display six years and millions of dollars to develop. The company had a team of 38 engineers working on it. Samsung had the technology designated as a national core technology protected by South Korea's industrial technology protection laws.
Samsung Display has said in a statement that it is “shocked at the results of the investigation by prosecutors, at a time when competitors are intensifying their technological rivalry.” It will be keeping a close eye on the trial.
