Samsung Electronics is reportedly seeking $429 million in damages from Japanese trading house Kuroda Electric and two other suppliers of LCD panels, according to a new report out of Reuters. Samsung reportedly filed an arbitration request with the International Chamber of Commerce (ICC) in New York City after its three former partners stopped supplying it with LCD panels. Kuroda Electric's statement suggests that Samsung is demanding $429 million in damages from all three suppliers combined, though no further details on the dispute have been revealed.
While Kuroda Electric has not revealed the identity of the other two companies that stopped supplying Samsung with LCD panels, industry watchers are presuming Samsung is seeking compensation from Sharp and Foxconn. The two display makers stopped providing the Seoul-based tech giant with LCD panels in December, which makes them a likely target of Samsung's ICC filing. Their joint venture Sakai Display Products reportedly stopped supplying Samsung with LCD panels in January in an effort to challenge the company's dominance in the TV market. Industry sources claim that the consumer electronics giant purchased millions of LCD panels from Sakai Display Products for its TV sets in 2016, so the firm's decision to drop its biggest client apparently made a large dent in Samsung's supply chain. The Seoul-based tech giant is now likely looking for now suppliers and is reportedly even willing to consider its domestic competitors as future partners.
While TVs aren't Samsung's main source of revenue, they're still generating significant profits on an annual basis seeing how the company has been the world's largest television manufacturer since 2006. However, as former suppliers are now looking to challenge its market dominance, Samsung will have to find a way to negotiate new supply chains and continue producing large volumes of TVs if it wants to maintain its lead in this segment in the short run. In the grand scheme of things, the company's strategy is to transition its LCD offerings to OLED panels, which is why it has recently been selling off its LCD-making operations and found itself in need of third-party suppliers seeing how its TV division isn't migrating to new technologies as quickly as Samsung Display.