Alvin Lim, associate director of Fitch Ratings

By Kim Yoo-chul

Samsung Electronics may eventually sign a peace treaty with Apple over patents, and the continuing clashes with the iPhone maker will have no rating impact on Korea’s top chaebol, said a top-level credit ratings agency.

The legal tussle between the two electronics giants entered a new phase after European regulators began investigating whether Samsung breached EU anti-trust laws.

The EU Commission has requested information from Apple and Samsung concerning the enforcement of standards-essential patents in the mobile telephony sector, it said in a statement.

“If the situation escalates to a point where both companies do not see any benefit in the ongoing legal battle, it will likely lead to a compromise that serves the interests of both,” Alvin Lim, associate director at Fitch Ratings, said in an interview with The Korea Times Monday.

Fitch said Samsung will maintain its aggressive countermeasures against Apple in an attempt to prevent any further negative impact on sales of its mobile devices.

“Should Apple suffer any damage from Samsung’s counter claims, it will inevitably review and assess the benefit of maintaining its current strategy in light of the potential negative outcome on its sales as well,” said Lim.

“Therefore, it will be critical for Samsung to win at least a few cases as early as possible to induce changes in Apple’s strategy,” Lim, who also covers tech industries for the agency, added.

The fight is further escalating as an increasing number of consumers use smartphones and wireless handsets to surf the Web, play games and download music and videos.

The Suwon, Gyeonggi Province-based Samsung and Apple have been involved in legal disputes since April when the latter filed a lawsuit in San Jose, Calif., claiming that the former’s Galaxy-branded mobile devices “slavishly” copied the designs of its popular iPhone and iPad.

Fitch clarified that it doesn’t have plans to cut its A+ rating on Samsung because it is well-positioned in terms of business profile and momentum.

“Samsung’s mobile division continues to perform very strongly,” said Lim.

“The company is well-positioned in terms of credit rating against its global peers in the tech industry. That’s because Samsung boasts market leading positions in its major business segments, well diversified business lines mitigating the volatility risk, superior technology and a sound financial profile,” he said.

“Fitch does not foresee any significant downside risk in Samsung’s credit profile in the short to medium term.”

Samsung became the world’s biggest smartphone maker in the third quarter of this year after surpassing Apple in the race despite the legal tussle. It aims to sell over 120 million smartphones next year, up from about 87 million this year, according to senior executives.

The U.K.-based ratings firm stressed that it does make sense for Samsung to push the so-called “two track approach” against Apple — business and patent issues.

Apple is the biggest client for Samsung as it buys as much as 9 trillion won worth of components including mobile application processors, LCDs and NAND flash memories for i-branded products.

Despite the legal fight, Apple will keep Samsung as its critical parts supplier because it is the industry’s sole company that can guarantee output commitment, pricing, on-time delivery and qualified products in components.

“Fitch believes Samsung’s current stance is an effective strategic approach. As much as it doesn’t want to lose Apple as its key customer, it will be as difficult for Apple to replace Samsung with others as the main mobile APs and memory chips supplier in the short term,” it said.

Samsung chief operating officer (COO) Lee Jae-yong agreed with Apple chief executive Tim Cook to supply parts over the next few years, pushing the U.S firm to use it chips and LCDs in upcoming i-products.

Touching on the outlook in semiconductors for next year, the ratings agency said, “We believe that a large portion of investment will be allocated for non-memory semiconductors and system LSIs, given the huge growth potential.”

Fitch expects Samsung will reduce investment in conventional DRAM chips given the oversupply situation, and said its 15 trillion won investment plan for semiconductors next year is “reasonable.”

“As for the industry situation, Fitch believes that the DRAM oversupply issue will ease in 2012 due to by limited capacity expansion. We don’t expect any substantial rebound in demand and prices especially in the midst of the suppressed economic conditions in developed markets,” it said, adding that the proliferation of “smart” devices will keep driving stable growth in the flash memory industry.