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Samsung faces $5.8bn loss in sales after tech leak

OLED-producing expertise passed on to Chinese rivals

The Samsung Galaxy Note 9 is displayed at  a product launch event in Brooklyn, New York, in August.   © AP

SEOUL -- Samsung Electronics calculates that the recent leak of its latest display technology to Chinese rivals will cost the company 6.5 trillion won, or $5.8 billion, in sales, according to prosecutors.

The South Korean prosecution team said on Nov. 30 that a Korean supplier to Samsung sold 16 panel-processing machines to Chinese companies and was also assisting the Chinese in acquiring the technology.

At issue is a technology called 3D lamination, which bonds together curved-edge smartphone cover glasses and organic light-emitting diode panels.

It is Samsung's latest display technology, and is used in the company's flagship Galaxy Note 9 smartphone, which was released in August.

Strong demand is expected for future flexible devices, including foldable phones, wearables and automotive display panels.

Samsung expects the technology leak to dent sales by $5.8 billion and profit by $890 million over the next three years. The South Korean company's market share in small OLED displays for smartphones tops 90%.

Prosecutors have indicted the president and top executives of Samsung supplier Toptec on charges of illegally selling technology to Chinese companies.

The recipients of the technology are suspected to include BOE Technology Group, a Beijing-based producer of displays and sensor devices, and three other companies.

Prosecutors said that 16 of the panel-processing devices were already sold, and that sales of eight others were being planned. Sources said that two companies, including BOE, actually received the technology, while two other companies only attempted to.

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