Broadcom's Billionaire Settlement: Korean Chip Market Opens Up After Antitrust Accord
1min read Recently, Broadcom (AVGO) experienced a 2.81% decline, marking a two-day losing streak with a total decrease of 3.07% over this period. Despite a weekly rise of 1.63%, the company's year-to-date performance shows a decline of 3.01%, bringing its latest market valuation to approximately 1,054.046 billion.
The Korean Fair Trade Commission has recently announced a settlement with Broadcom over accusations of monopolizing the system-on-chip (SoC) market for cable television set-top boxes in Korea. According to the settlement, Broadcom has agreed to cease its requirement for Korean set-top box manufacturers to solely utilize its SoC products and to pay a settlement fee of 13 billion won, equivalent to about 65.32 million yuan.
The antitrust body accused Broadcom of mandating that local manufacturers present only Broadcom-based products while bidding for cable operator contracts or alter existing commitments to include Broadcom SoCs. Broadcom has pledged not to modify current agreements to the detriment of downstream companies nor will it employ coercion or incentives to secure greater SoC orders in the future.
In an effort to foster a mutually beneficial environment, Broadcom has outlined plans to support Korean chip design and system semiconductor companies. This includes initiatives to operate a semiconductor talent education center, provide consulting support, and organize seminars and conferences, all funded by the 13 billion won co-prosperity fund provided by Broadcom.
As part of the settlement process, the Korean Fair Trade Commission has started the permission procedure and will proceed with gathering stakeholder feedback, deliberating, and confirming decisions.
The involvement of the Korean regulatory body underscores the importance of maintaining competitive practices within critical industries like semiconductors, where Broadcom holds significant influence with its extensive portfolio of semiconductor and infrastructure software solutions. The company's actions with set-top box manufacturers illustrate the challenges within sectors heavily reliant on semiconductor components.
Looking ahead, the Korean Fair Trade Commission intends to consult with stakeholders, planning to present Broadcom’s co-prosperity fund initiative to the full committee meetings. This development aligns with broader strategies to support SMEs within the semiconductor sector, echoing Korea's commitment to innovation and economic diversification.
