The Fair Trade Commission will determine the level of sanctions next month on Broadcom, which is accused of forcing Samsung into long-term contracts.

[서울 = 뉴스핌] 알파경제 = The Fair Trade Commission will decide whether to sanction U.S. semiconductor company Broadcom, which is suspected of forcing Samsung Electronics to sign a long-term contract to purchase smartphone parts next month.

According to the industry on the 13th, the FTC will hold a plenary session on the 6th of next month to deliberate on Broadcom's abuse of trading status. Broadcom is accused of forcing Samsung Electronics to sign a long-term contract (LTA) to purchase smartphone parts such as Wi-Fi and Bluetooth (violation of the Fair Trade Act) using unfair means such as suspension of approval of new orders, shipment of existing orders and suspension of technical support.

According to the contract signed in March 2020, Samsung Electronics had to purchase more than $760 million in Broadcom's parts every year for three years from 2021, and if the actual purchase amount was less than that, it had to compensate Broadcom for the difference.

Previously, the Fair Trade Commission consulted with Broadcom to draw up a "consent resolution" aimed at creating a 20 billion won semiconductor win-win fund. However, Samsung Electronics rejected the motion in June and resumed the deliberation process for sanctions when it opposed it, saying, "The company's damage relief was insufficient."

At a plenary session to be held early next month, FTC members are expected to examine whether Broadcom had a superior trading status, whether it signed a contract that Samsung Electronics did not want, and whether the terms of the contract were unfair.

Broadcom denies the charges and is expected to engage in a fierce battle with the FTC examiner who investigated the case. In a plenary session on June 7 to deliberate on whether to cite the agreement, Broadcom argued that Broadcom was in a "second" position as a company that manufactures parts under the commission of Samsung, and that the contract with Samsung Electronics was between leading operators for mutual benefit.

"Samsung Electronics has obtained all the desired conditions in return for the minimum purchase agreement," said a Broadcom representative. "As sales of the Galaxy S20 and S21 fall short of our internal goals, we are shifting responsibility for poor sales forecasts and sluggish sales to Broadcom."

On the other hand, the FTC examiner says Broadcom used unfair means to force Samsung Electronics to sign contracts against Samsung Electronics, and a number of data supporting them were secured during the investigation. Samsung Electronics also claimed at a plenary session in June that it had signed numerous contracts to avoid the unprecedented suspension of smartphone production.

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