July 8, 2026
The Secretariat of the Korea Fair Trade Commission (KFTC, Chairman Biung-Ghi Ju) has submitted an Examiner’s Report to the Commission detailing the facts of conduct, alleged illegality, and proposed sanctions regarding suspected violations of the Monopoly Regulation and Fair Trade Act (hereinafter the "Fair Trade Act") by global non-memory semiconductor companies NXP and ADI. Consequently, deliberation procedures for each case have commenced, and the respective reports were dispatched to the respondents on July 8.
Respondents:
- NXP: NXP Semiconductors N.V. (Netherlands), NXP Semiconductors Netherlands B.V. (Netherlands), and NXP Semiconductors Korea Ltd. (South Korea) [hereinafter collectively referred to as "NXP"].
- ADI: Analog Devices, Inc. (USA), Analog Devices International U.C. (Ireland), and Analog Devices Korea Ltd. (South Korea) [hereinafter collectively referred to as "ADI"].
Note: The Examiner’s Report contains the examiner's findings on the illegality and proposed sanctions identified during the investigation, which do not bind the Commission's final decision. The final judgment on this case will be rendered following an independent deliberation by the Commission.
The respondents operate a "Ship & Debit" (hereinafter S&D) transaction system. Under this system, a domestic distributor purchases products at a "standard supply price" set by the respondents. If the distributor requests a discount for a specific customer and receives the respondent's approval, the respondent refunds the difference (standard supply price minus the actual supply price) after confirming that the distributor resold the product under the approved terms. The examiner determined that the respondents committed the following violations during this process:
1. Respondent NXP
Since at least 2012 to the present, under the S&D transaction system, NXP: ① Prevented other distributors from initiating transactions with a customer once a specific distributor dealing with NXP had secured that customer (effectively granting "exclusive distribution rights"). ② Pre-set the margin rates that distributors could secure.
2. Respondent ADI
Since at least 2020 to the present, ADI: ① Pre-fixed the margin rates that its distributors could secure. ② Simultaneously designated and enforced the resale prices that distributors could charge their customers.
<Examiner's Proposed Sanctions>
The examiner judged that the actions of both companies constitute highly grave violations of the Fair Trade Act and proposed issuing corrective orders and imposing penalty surcharges for both respondents:
- NXP: Judged to have violated ① Article 45, Paragraph 1, Subparagraph 7 (Restriction of Transaction Partners) and ② Article 45, Paragraph 1, Subparagraph 6 (Interference with Management).
- ADI: Judged to have violated ① Article 45, Paragraph 1, Subparagraph 6 (Interference with Management) and ② Article 46 (Resale Price Maintenance).
The examiner estimated the relevant revenue affected by NXP's respective actions to be approximately 880 million USD (approx. 1.3 trillion KRW) for the first violation and 660 million USD (approx. 1 trillion KRW) for the second. The relevant revenue affected by ADI's actions is estimated at approximately 800 million USD (approx. 1.2 trillion KRW).
Following deliberation, the Commission may impose a penalty surcharge of up to 4% of the relevant revenue affected by each violation, in accordance with relevant laws.
The respondents are fully guaranteed their right to defense, including the opportunity to submit written opinions on the Examiner's Report and request the inspection or copying of evidentiary documents. The KFTC plans to render a final decision through a Commission hearing after thoroughly reviewing the respondents' opinions.
By establishing a fair trade order in the semiconductor sector—a core foundation of the national economy and a future growth engine—the KFTC will strive to guarantee distributors' autonomous decision-making authority over transaction conditions, such as customers and prices, while also promoting price competition among distributors.