Broadcom's Korean Case Ends in Final Ruling: Supply Leverage Cannot Become a Tool of Coercion
2026-11-06
On October 27, 2026, the Supreme Court of Korea dismissed the appeal by Broadcom and its affiliates, upholding the penalty decision issued by the Korea Fair Trade Commission (KFTC) in September 2023. Broadcom was fined KRW 18.664 billion (approximately RMB 93.32 million) and ordered to take corrective measures for abusing its superior bargaining position and forcing Samsung Electronics to sign a long-term procurement agreement by cutting off component supplies. The case is now final and effective.
The dispute began in 2019. To diversify smartphone component suppliers, Samsung Electronics sought to introduce RF front-end, Wi-Fi, and Bluetooth suppliers other than Broadcom for models such as the Galaxy S20. Starting in February 2020, Broadcom, citing a "review of the supply relationship," successively suspended purchase order approvals, halted shipments, paused production of relevant components, and cut off some technical support.Facing the risk that flagship models could be discontinued, Samsung signed an agreement in March 2020 committing to purchase at least US$760 million of Broadcom RF front-end, Wi-Fi, and Bluetooth components annually from 2021 to 2023, with shortfalls to be made up. The agreement was terminated early in August 2021.
Core of the Ruling
The key issue was not whether the long-term procurement agreement itself was lawful, but whether it was reached through coercion. The KFTC found that Broadcom held an overwhelming share in markets such as RF front-end and exploited Samsung's dependence on key components, using supply cutoff as leverage to force the other party to accept unfavorable terms. This restricted downstream manufacturers' right to choose suppliers independently and squeezed the space for fair competition among other chipmakers. The commission estimated that Samsung bore at least US$160 million in additional costs due to limited procurement choices, while Samsung claimed total losses of US$326.3 million.
Broadcom challenged the penalty and filed suit in November 2023. The Seoul High Court dismissed its claims in May 2026, finding that Broadcom used abnormal supply interruption measures to force Samsung to sign against its will and that the agreement deviated from normal trade practices. The Supreme Court upheld that judgment.
For upstream chipmakers, technical advantages and market share can bring bargaining power, but supply advantages cannot be directly converted into coercive trading tools. In fields heavily dependent on specific chips, such as smartphones and automotive electronics, downstream manufacturers' right to choose is becoming a key focus of antitrust protection.
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