Going Too Far: U.S. ITC Demands HBM Trade Secrets from SK Hynix

It has been revealed that the United States International Trade Commission (ITC), claiming to verify whether Samsung Electronics infringed on the patents of a U.S. company, has demanded confidential information related to High Bandwidth Memory (HBM) from SK hynix. As the ITC has requested not only HBM design methods but also comprehensive trade secrets including production capacity and cost information, anxiety is growing in Korea’s semiconductor industry.

According to business circles and trade authorities on Feb. 11, the ITC recently granted an information disclosure motion of this nature that U.S. semiconductor company Netlist had filed against SK hynix.

The ITC plans to request key product information and other details from SK hynix in accordance with Netlist’s request. Specifically, the request list includes HBM design, operating methods, and components. The ITC also plans to request product cost breakdowns from SK hynix, including labor costs and facility expenses. This amounts to a comprehensive demand for information that constitutes corporate trade secrets.

This request is linked to the ongoing patent litigation between Netlist and Samsung Electronics. Netlist filed a complaint with the ITC in November last year, alleging that Samsung Electronics’ memory semiconductors, including HBM and DDR5, infringed on its technology. Netlist has also requested that the ITC issue an exclusion order to block the importation of these products into the United States.

Netlist suddenly requested the ITC for information on SK hynix’s products and investments to support its claims, and the ITC accepted this request. A business source said, “From a company’s perspective, disclosing trade secrets to outside parties is itself a significant burden,” adding that “the ITC’s demands are excessive in certain respects.”

Netlist’s move to drag SK hynix into its dispute with Samsung Electronics appears aimed at justifying its request to ban semiconductor imports. The ITC issues import bans after verifying both patent infringement and whether an industry utilizing the patent exists within the United States (domestic industry requirement). This is because there would be no practical benefit in blocking imports if no domestic industry is harmed by the patent infringement.

What is concerning is that Netlist is attempting to fit the domestic industry requirement by citing SK hynix’s investments in the United States. Previously, Netlist engaged in patent litigation with SK hynix and reached a settlement in 2021 under which it receives royalties from SK hynix. Based on this, Netlist claims that SK hynix is manufacturing products using its patents.

Netlist’s logic is that since SK hynix, which utilizes its patents, is conducting business in the United States, the domestic industry requirement is satisfied, and therefore Samsung Electronics’ products that infringe on the patent should be barred from export to the U.S.

The ITC also plans to request information from SK hynix on whether it would be able to meet local demand if the import of Samsung Electronics products into the United States is banned. While the likelihood of the ITC actually issuing an exclusion order is low, this is interpreted as a measure to assess potential harm to U.S. local demand companies in the unlikely event that imports are banned.

The industry is closely watching the level of SK hynix’s response. An industry source said, “If SK hynix cooperates with the information request, it could also put Samsung Electronics, which is embroiled in a patent dispute, in an awkward position,” adding that “it is a burdensome situation whether to actively cooperate or not.”

Under the policies of the Donald Trump administration, which strongly favors domestic companies, a string of aggressive moves by U.S. Non-Practicing Entities (NPEs)—often called “patent trolls”—is heightening anxiety in the semiconductor industry. In fact, Monolithic 3D, a U.S. NPE, filed a complaint with the ITC against SK hynix and Japan’s Kioxia on the 29th of last month (local time). Monolithic 3D claims that SK hynix’s HBM2E, HBM3, HBM3E, and other products have infringed on its 3D stacking technology patents.

An industry source expressed concern, saying, “NPEs often seek to extract large settlement amounts through patent litigation,” and “with the profits of Korean semiconductor companies increasing significantly, lawsuits aimed at securing settlement payments could increase.”