[Alpha Biz= Kim Jisun] Broad request covering design, production capacity and cost details raises concerns in Korea’s semiconductor industry

The U.S. International Trade Commission (ITC) has requested that SK Hynix (000660) submit confidential information related to high-bandwidth memory (HBM) as part of its review into whether Samsung Electronics (005930) infringed on a U.S. company’s patents, according to a report.

The request, which reportedly covers not only HBM design architecture but also production capacity and cost structures, has heightened concerns across South Korea’s semiconductor industry.

According to an exclusive report by the Seoul Economic Daily on Feb. 11, the ITC recently granted a motion filed by U.S. semiconductor firm Netlist seeking disclosure of information from SK Hynix.

In line with Netlist’s request, the ITC plans to require SK Hynix to provide detailed information on key products, including HBM design specifications, operational mechanisms, and structural components. The commission is also expected to request cost breakdowns encompassing labor and facility expenses—effectively seeking access to core trade secrets.

The request is linked to an ongoing patent dispute between Netlist and Samsung Electronics. In November last year, Netlist filed a complaint with the ITC alleging that Samsung’s memory products, including HBM and DDR5, infringed on its patents. Netlist also sought an exclusion order barring the importation of the allegedly infringing products into the United States.

To bolster its claims, Netlist unexpectedly requested that the ITC obtain product and investment-related information from SK Hynix, a move that the commission has reportedly accepted.

“From a company’s standpoint, disclosing trade secrets externally is a significant burden,” an industry source said. “The ITC’s request appears excessive in scope.”

Observers believe Netlist’s move to involve SK Hynix is aimed at satisfying the ITC’s “domestic industry” requirement, a key criterion in determining whether to issue an import ban. In addition to assessing patent infringement, the ITC must determine whether a U.S. industry exists that practices the asserted patents. Without demonstrable domestic injury, an exclusion order would carry limited justification.

Concerns have arisen that Netlist may attempt to leverage SK Hynix’s U.S. investments to argue that the domestic industry requirement is met. Netlist previously reached a settlement with SK Hynix in 2021 following patent litigation, under which SK Hynix agreed to pay royalties. Netlist has argued that this demonstrates SK Hynix’s use of its patented technology.

Based on this logic, Netlist contends that because SK Hynix utilizes its patents and conducts business in the United States, the domestic industry requirement is satisfied—thereby justifying a ban on Samsung products alleged to infringe the same patents.

The ITC is also expected to seek information from SK Hynix regarding whether it could meet U.S. market demand if Samsung’s products were barred from import. While the likelihood of an actual exclusion order remains low, such information would help assess potential impacts on U.S. customers in the event that an import ban were imposed.

 

 

 

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