/ Samsung Electronics

Samsung Electronics has strongly denied allegations that it pressured a supplier to relocate its factory to the United States and then reduced orders afterward.

In a statement released Tuesday, Samsung said the claims were unfounded and insisted that it has always complied with regulations while maintaining fair partnerships with suppliers.

“Samsung Electronics has made every effort to comply with laws and pursue mutual growth with its partners,” the company said. “There have been no violations of the law, and the claims made by Company A are a one-sided argument based solely on its own perspective.”

According to industry sources, the Fair Trade Commission (FTC) is currently reviewing a complaint filed by Company A, a subcontractor, alleging that Samsung unfairly reduced entrusted work during their business relationship.

Company A is a Korean cable supplier that established a U.S. subsidiary to support a 5G project. The firm claims that after signing a subcontract with Samsung, orders were cut when U.S. telecom operator Verizon changed the type of cables used in its 5G equipment. The reduced orders allegedly led to the bankruptcy of the U.S. subsidiary.

The company has also accused Samsung of demanding a shorter delivery schedule and pressuring it to relocate its factory. In 2021, the firm moved its plant from Irvine, California, to Dallas, Texas.

Samsung rejected the accusation outright.

“We never forced Company A to relocate its factory,” Samsung said, adding that it sources cables from various suppliers and therefore had no need to pressure the company to move production facilities.

The company also denied requiring the supplier to make facility investments, stating that quality evaluations were conducted before signing the contract and that any investment decisions were made independently by the supplier.

Samsung further disputed the claim that it reduced orders unfairly.

“The decrease in orders from Company A was simply due to a lack of orders from the customer,” Samsung said. “This cannot be considered an unjust cancellation of entrusted work, and Samsung has completed payment for all orders placed.”

The FTC is expected to determine whether Samsung violated provisions of the Subcontracting Act that prohibit unfair cancellation of subcontracted work.

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