[Exclusive] "Failed Talks, Pay 600 Million" Japanese Semiconductor Equipment Company Files Patent Lawsuit Against Yujin Tech

Japan Kokusai Files Compensation Lawsuit Against Eugene Tech
Full-Scale Korea-Japan Semiconductor Patent Dispute
More Lawsuits May Follow as Companies Aim for Semiconductor Revival

It has been confirmed that a Japanese semiconductor equipment company has filed a patent infringement lawsuit against a Korean company. As Japan actively pursues large-scale investment, development, and the attraction of global companies under the banner of reviving its semiconductor kingdom, this move is seen as a full-scale effort to secure technology patents. There is also a possibility that patent lawsuits against Korean semiconductor companies may increase in the future.

According to related industries on the 21st, Kokusai Electric, a Japanese advanced semiconductor equipment manufacturer, along with its domestic subsidiary Kokusai Electric Korea, filed a patent infringement lawsuit against the mid-sized Korean company Eugene Technology at the Seoul Central District Court earlier this month.

Kokusai Electric is a Japanese semiconductor equipment manufacturer that was listed on the Tokyo Stock Exchange in October last year. At the time of its listing, it attracted attention by recording the largest initial public offering (IPO) in Japan in five years, following SoftBank. The company produces equipment that deposits films on silicon wafers and counts Intel among its major clients.

Kokusai Electric is reportedly claiming a total of 600 million KRW in damages. The company stated, "We initially informed Eugene Technology of the intellectual property infringement to seek an amicable resolution, but after failing to reach an agreement through dialogue, we had no choice but to file a lawsuit."

Kokusai Electric claims that Eugene Technology has recklessly used four technologies for which it was granted patents in Korea between 2011 and 2022, thereby infringing on its intellectual property rights. According to industry sources, these technologies are related to atomic layer deposition (ALD) equipment. This technology builds thin films by stacking atomic layers one by one during the semiconductor deposition process. It has attracted significant attention in the industry because it can create thinner films than existing physical vapor deposition (PVD) and chemical vapor deposition (CVD) methods. Eugene Technology commercialized ALD equipment in 2021 and expanded its business area, which led to the patent dispute.

After reviewing the recently received complaint, Eugene Technology announced through an electronic disclosure yesterday that it has been sued and stated, "We plan to actively respond to the legal procedures through our legal representatives." Eugene Technology has decided to stand its ground, marking the beginning of a full-scale litigation battle between Korean and Japanese companies.

Kokusai Electric’s lawsuit is expected to have a considerable impact on the Korean semiconductor equipment industry regardless of the amount involved. Eugene Technology is a mid-sized company that develops equipment necessary for thin film formation and was listed on KOSDAQ in 2006. It currently supplies equipment to Samsung Electronics, SK Hynix, Micron, and others. Notably, Eugene Technology was recognized for its contribution to domestic production of core semiconductor equipment and was selected as an excellent case in the Patent Office’s 2022 ‘Patent-Based R&D Strategy Support Project (IP-R&D).’ Even a company that was considered strong in patent matters could not avoid legal disputes. An industry insider predicted, "If Eugene Technology loses this lawsuit, the shock to the industry will be significant."

Following Kokusai Electric, it cannot be ruled out that other Japanese semiconductor companies will also file patent lawsuits. The outcome of this trial could serve as a guideline if technology disputes arise between Korean and Japanese semiconductor companies. Recently, Japan has been actively filing patents related to semiconductor technology. The more patents Japan holds, the greater the potential for conflicts with Korean companies. According to an analysis released by the Korean Intellectual Property Office in December last year on ‘global semiconductor automatic transfer system patents’ filed in major countries, Japan filed the most patents with 1,238 cases (67.7%) between 2012 and 2021. Korea followed with 398 cases (21.8%). The top applicants were Japanese companies such as Daifuku (608 cases, 33.3%) and Murata Machinery (586 cases, 32.1%), with Korea’s SEMES (248 cases, 13.6%) ranking next.