China's largest display panel manufacturer BOE may find it difficult to enter the U.S. market for the next 14 years and 8 months, causing domestic display stocks to soar.
LG Display shares traded at 12,630 won on the KOSPI market at 12:22 p.m. on the 13th. The stock price rose by 16.41% (1,780 won) compared to the previous day. At the same time, shares of corporations such as Duksan Neolux and BH, which are engaged in organic light-emitting diode (OLED) materials, also recorded double-digit growth.
Expectations that domestic corporations could benefit if China's BOE loses market share in the U.S. seem to have stimulated investor sentiment.
The U.S. International Trade Commission (ITC) issued a preliminary ruling on Nov. 11, stating that BOE and seven subsidiaries violated Section 337 of the Tariff Act by improperly using Samsung Display's trade secrets. This comes nearly two years after Samsung Display filed a complaint with the ITC alleging that BOE stole trade secrets related to OLED technology.
According to the preliminary ruling obtained by Chosunilbo, the ITC largely acknowledged BOE's trade secret infringement and improper acquisition of confidential information through employee poaching. The ITC imposed a 'Limited Importation Ban Order' (LEO) on BOE for 14 years and 8 months, directing the company to stop all marketing, sales, advertising, and inventory sales in the U.S. from BOE's headquarters in China and local U.S. subsidiaries. This is regarded as an unprecedented measure in the industry.
The final ruling is expected in November. While the content of the ruling may change somewhat, interpretations suggest that this unprecedented strong sanction serves as a warning from the U.S. to eliminate illegal actions related to Chinese technology. (☞ U.S. expels China's OLED for 14 years and 8 months... Samsung tech theft gets blocked in the U.S.)
The securities industry also forecasts domestic corporations will benefit from this ITC preliminary ruling. As BOE's supply of OLED panels for new products such as Apple's iPhone series and Meta's smart glasses becomes difficult, there is a consensus that there is a greater possibility of strengthening cooperation with Korean companies.
Kim Jong-bae, a researcher at Hyundai Motor Securities, noted, "While domestic demand in China cannot be ignored, it is true that Korean display corporations are absolutely advantageous in the future supply chain restructuring. We should not only focus on the iPhone, but also on the positive aspects for Korean corporations in the OLED transition process of IT products like MacBooks and iPads."