Tue, Aug 28, 2012 - Page 15 News List

Samsung shares plunge after ruling

SHARP DROP:According to analysts, whether the US sales ban will erode Samsung’s future revenue depends on which specific products the patents dispute is to include

AFP and Bloomberg, SEOUL

South Korea’s Samsung Electronics Co sought yesterday to rally employees after a US$1.05 billion US court judgment in favor of arch-rival Apple Inc pushed its shares sharply lower.

Shares tumbled 7.5 percent, the biggest single-day percentage drop the electronics giant has seen in nearly four years, after the jury in San Jose, California, on Friday said the firm had infringed on half a dozen patents held by Apple.

Shares of other Asian smartphone makers that run Google Inc’s Android operating system, the partial target of Apple’s lawsuit, were also lower.

Analysts said the fine was not a major issue for Samsung, the world’s biggest technology firm, but the jury verdict raised concerns about a possible ban on some US sales when the judge in the case makes her final ruling.

This was expected on Sept. 20, but could be delayed.

Samsung, in a blog message to staffers, said it was “very disappointed” with the ruling — part of a legal battle in nine countries between the two technology titans.

However, the company, which has announced it would contest the verdict, said it would “continue to do our utmost until our arguments have been accepted.”

Samsung said courts in the UK, the Netherlands, Germany and South Korea had previously ruled it had not copied Apple’s designs.

Analysts said the judge could later decide to triple the damages because jurors found Samsung acted “wilfully,” and order a partial product ban.

If the ruling leads to a US sales ban on the Samsung products subject to dispute, it will start eroding the company’s revenue from the fourth quarter, Hi Investment and Securities analyst Song Myung-sup said.

Some analysts said the key point would be whether the patents battle spreads to Samsung’s flagship Galaxy SIII phone.

The products ruled to have infringed Apple’s patents are all older models.

“Samsung’s profit is expected to reach 7.5 trillion won [US$6.7 billion] during the third quarter. One trillion won is not a problem for Samsung,” said James Song of Daewoo Securities.

Daishin Securities analyst Jeff Kang said the US verdict would have no immediate impact on the worldwide operations of Samsung, which had an estimated 20 trillion won in cash reserves.

However, US operations would be affected, he said.

Separately, Samsung Electronics agreed to invest 779 million euros (US$974 million) in ASML Holding NV, joining Intel Corp and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) in taking a stake in Europe’s largest chip-equipment maker to secure future technology.

Samsung will acquire a 3 percent equity holding in Veldhoven, Netherlands-based ASML for 503 million euros and invest a further 276 million euros in research and development of next-generation lithography technologies, ASML said yesterday in a statement.

The participation of Samsung completes the co-called co-investment program announced last month, and ASML no longer plans to solicit the participation of additional customers, the company said.

Under the investment program, ASML will speed up the development of EUV or extreme ultraviolet technology, which will help shrink the size of chips while increasing their capacity and speed for devices such as mobile phones and tablet computers.

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