Samsung seeks arbitration against Sharp and other LCD panel makers over supply halt

Samsung Electronics has filed a request for international arbitration against Sharp and two other LCD panel makers over supply panel halt, The Korea Herald reported Friday.

Owned by iPhone manufacturer Foxconn, Sharp said recently it would stop supplying LCDs to Samsung.

The Galaxy maker is now seeking $492 million in compensation from Sharp and other vendors, said industry sources. Samsung reportedly filed its request with the International Chamber of Commerce (ICC).

In the complaint, Samsung is demanding that Sharp and others resume LCD panel supply or compensate the loss. The world’s largest TV maker, Samsung receives an average of four to five million LCD panels annually from Sharp alone.

As Sharp is now focused on establishing new production plants to supply OLED panels to Apple for iPhone 8, Samsung has held talks with LG Display and other LCD suppliers to reduce any impact on its business.

Shortages of LCD panels have caused prices to increase in the second half of 2016. Demand during the first half of 2017 is expected to rise above normal levels.

On a related note, The Korea Times newspaper said that Samsung Electronic and LG Electronics are considering moving more of their business to U.S. as part of efforts to create jobs for Americans under Trump’s “Make American Great Again” slogan.

The two companies currently operate their own factories in Mexico and export products to U.S. without having to pay taxes based on the North American Free Trade Agreement.

Samsung also runs a chip plant in Texas.

Both firms are said to be in the initial stage of considering U.S. production.

“Nothing has been decided as yet,” said an LG official. “We are currently monitoring the changing circumstances of the U.S. market,” Samsung commented.

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