Broadcom squeezed Samsung, now South Korea's squeezing back – hard
(2023/06/14)
- Reference: 1686725829
- News link: https://www.theregister.co.uk/2023/06/14/broadcom_samsung_south_korea/
- Source link:
South Korea's Fair Trade Commission has sent Broadcom back to the drawing board, after finding it illegally tried to squeeze Samsung.
As the Commission explained in a Tuesday [1]adjudicaiton , Broadcom and Samsung were in talks for a long-term supply agreement when the American chipmaker demanded the Korean giant sign or it would suspend shipments and support services.
Broadcom share price pops on VMware rumors
Broadcom's share price jumped from $805 to $860 on Tuesday, after Reuters [2]reported EU regulators will sign off on its acquisition of VMware.
The newswire reported that proposed remedies to ensure competition in the market for host bus adapters found approval from EU regulators. The deal is yet to be approved by UK and US authorities.
Broadcom also wanted Samsung to commit to spending over $760 million a year, to make up the difference for any shortfalls, and not to buy from rivals.
With the market for the components it needs tight, Samsung reportedly signed. Then, when a certain viral pandemic cruelled its business, the giant conglomerate found itself having to buy parts it didn't need. The chaebol estimates the deal cost it millions.
News of the deal eventually reached the regulator, which in 2022 asked Broadcom to propose a remedy – a common method of dispute resolution in South Korea.
[3]
Broadcom proposed a $15.5 million fund to stimulate South Korea's small semiconductor outfits, plus extra support for Samsung.
[4]
[5]
On Tuesday, the Commission decided that's not a reasonable restitution because it doesn't include compensation for the impacted parties.
That's bad news for Broadcom, because it means the regulator will now escalate matters – first by determining if the chipmaker broke local laws and then by considering a different penalty.
[6]
South Korea is protective of its local businesses – even giants like Samsung that are usually capable of fending for themselves. Broadcom reps will soon have some tricky-to-negotiate meetings on their agendas.
[7]Born in the USA! Broadcom will produce American-made RF modules for Apple
[8]Broadcom CEO promises $2 billion annual R&D boost to make VMware better at the things it already does
[9]Broadcom chases AI craze with ML-tuned switch ASICs
[10]Qualcomm tries to kick holes in logic behind €242M fine
At least the corporation's legal team has experience at this sort of thing. In 2018 it was [11]probed by US authorities over contract practices, and in 2021 was [12]forced to stop some anticompetitive practices. In 2022 it was [13]in strife again – this time for allegedly forcing its customers to sign exclusive supply contracts.
The serial acquirer also lost a regulatory rumble over its [14]attempted acquisition of Qualcomm , and is currently trying to explain why its [15]proposed acquisition of VMware won't harm competition.
Now it awaits South Korea's wrath – and perhaps Samsung's too. ®
Get our [16]Tech Resources
[1] https://www.ftc.go.kr/www/selectReportUserView.do?key=10&rpttype=1&report_data_no=10073
[2] https://www.reuters.com/markets/deals/eu-antitrust-regulators-okay-broadcom-vmware-deal-sources-says-2023-06-12/
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2ZImPxkUpqVDfiFj3aC1hgAAAAFM&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZImPxkUpqVDfiFj3aC1hgAAAAFM&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZImPxkUpqVDfiFj3aC1hgAAAAFM&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZImPxkUpqVDfiFj3aC1hgAAAAFM&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[7] https://www.theregister.com/2023/05/23/broadcom_will_produce_americanmade_rf/
[8] https://www.theregister.com/2023/05/04/broadcom_vmware_research_funds_pledge/
[9] https://www.theregister.com/2023/04/20/broadcom_chases_ai_craze/
[10] https://www.theregister.com/2023/03/14/qualcom_eu_fine_appeal/
[11] https://www.theregister.com/2018/01/18/broadcomm_antitrust_probe/
[12] https://web.archive.org/web/20230206214612/https://www.ftc.gov/news-events/news/press-releases/2021/11/ftc-approves-final-order-requiring-semiconductor-supplier-broadcom-cease-its-anticompetitive-conduct
[13] https://www.theregister.com/2022/04/25/ftc_investigating_broadcom_for_anticompetitive/
[14] https://www.theregister.com/2018/03/14/broadcoms_bid_for_qualcomm_ends_in_tears/
[15] https://www.theregister.com/2023/04/24/cma_broadcom_vmware_stage_2/
[16] https://whitepapers.theregister.com/
As the Commission explained in a Tuesday [1]adjudicaiton , Broadcom and Samsung were in talks for a long-term supply agreement when the American chipmaker demanded the Korean giant sign or it would suspend shipments and support services.
Broadcom share price pops on VMware rumors
Broadcom's share price jumped from $805 to $860 on Tuesday, after Reuters [2]reported EU regulators will sign off on its acquisition of VMware.
The newswire reported that proposed remedies to ensure competition in the market for host bus adapters found approval from EU regulators. The deal is yet to be approved by UK and US authorities.
Broadcom also wanted Samsung to commit to spending over $760 million a year, to make up the difference for any shortfalls, and not to buy from rivals.
With the market for the components it needs tight, Samsung reportedly signed. Then, when a certain viral pandemic cruelled its business, the giant conglomerate found itself having to buy parts it didn't need. The chaebol estimates the deal cost it millions.
News of the deal eventually reached the regulator, which in 2022 asked Broadcom to propose a remedy – a common method of dispute resolution in South Korea.
[3]
Broadcom proposed a $15.5 million fund to stimulate South Korea's small semiconductor outfits, plus extra support for Samsung.
[4]
[5]
On Tuesday, the Commission decided that's not a reasonable restitution because it doesn't include compensation for the impacted parties.
That's bad news for Broadcom, because it means the regulator will now escalate matters – first by determining if the chipmaker broke local laws and then by considering a different penalty.
[6]
South Korea is protective of its local businesses – even giants like Samsung that are usually capable of fending for themselves. Broadcom reps will soon have some tricky-to-negotiate meetings on their agendas.
[7]Born in the USA! Broadcom will produce American-made RF modules for Apple
[8]Broadcom CEO promises $2 billion annual R&D boost to make VMware better at the things it already does
[9]Broadcom chases AI craze with ML-tuned switch ASICs
[10]Qualcomm tries to kick holes in logic behind €242M fine
At least the corporation's legal team has experience at this sort of thing. In 2018 it was [11]probed by US authorities over contract practices, and in 2021 was [12]forced to stop some anticompetitive practices. In 2022 it was [13]in strife again – this time for allegedly forcing its customers to sign exclusive supply contracts.
The serial acquirer also lost a regulatory rumble over its [14]attempted acquisition of Qualcomm , and is currently trying to explain why its [15]proposed acquisition of VMware won't harm competition.
Now it awaits South Korea's wrath – and perhaps Samsung's too. ®
Get our [16]Tech Resources
[1] https://www.ftc.go.kr/www/selectReportUserView.do?key=10&rpttype=1&report_data_no=10073
[2] https://www.reuters.com/markets/deals/eu-antitrust-regulators-okay-broadcom-vmware-deal-sources-says-2023-06-12/
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2ZImPxkUpqVDfiFj3aC1hgAAAAFM&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZImPxkUpqVDfiFj3aC1hgAAAAFM&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZImPxkUpqVDfiFj3aC1hgAAAAFM&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZImPxkUpqVDfiFj3aC1hgAAAAFM&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[7] https://www.theregister.com/2023/05/23/broadcom_will_produce_americanmade_rf/
[8] https://www.theregister.com/2023/05/04/broadcom_vmware_research_funds_pledge/
[9] https://www.theregister.com/2023/04/20/broadcom_chases_ai_craze/
[10] https://www.theregister.com/2023/03/14/qualcom_eu_fine_appeal/
[11] https://www.theregister.com/2018/01/18/broadcomm_antitrust_probe/
[12] https://web.archive.org/web/20230206214612/https://www.ftc.gov/news-events/news/press-releases/2021/11/ftc-approves-final-order-requiring-semiconductor-supplier-broadcom-cease-its-anticompetitive-conduct
[13] https://www.theregister.com/2022/04/25/ftc_investigating_broadcom_for_anticompetitive/
[14] https://www.theregister.com/2018/03/14/broadcoms_bid_for_qualcomm_ends_in_tears/
[15] https://www.theregister.com/2023/04/24/cma_broadcom_vmware_stage_2/
[16] https://whitepapers.theregister.com/