Seoul, Jan 14 (IANS) Amid a recent supercycle in the chip industry led by an artificial intelligence (AI) boom, South Korean chipmakers are becoming vulnerable to non-practicing entities (NPEs) as Washington moves to strengthen patent protection, industry watchers said on Wednesday.

NPEs, commonly known as “patent trolls,” generate profits by licensing or enforcing patents rather than producing goods, reports Yonhap news agency.

Such concerns have emerged as Samsung Electronics Co. and SK hynix Inc. post record-breaking earnings and expand their presence in the global chip market, increasing incentives for NPEs to file patent lawsuits.

Others cite protectionist patent policies under the U.S. Donald Trump administration, which weakened safeguards designed to curb abusive litigation in the United States.

In 2011, the U.S. introduced the inter partes review (IPR) system to limit excessive lawsuits by allowing challenges to patent validity. However, the Trump administration tightened eligibility rules for initiating reviews, undermining the system’s effectiveness.

The percentage of cases denied review was previously estimated at around 30 percent but surged to nearly 90 percent after a new chief of the U.S. Patent and Trademark Office took office, according to sources.

Industry watchers said lawsuits filed by NPEs could weigh down South Korean chipmakers’ research and investment activities, ultimately hurting their technological competitiveness.

“The future of the semiconductor sector, which is the nation’s key industry, faces not just technology competition but external headwinds, such as intellectual property policies,” an industry watcher said.

“We should not be taken advantage of by patent trolls. We need to deliver our voices to the U.S. government and the international community and prepare practical countermeasures promptly.”

Meanwhile, Samsung Electronics ranked second in the global smartphone market in 2025, industry data showed, with its shipments rising 5 per cent from a year earlier, driven by strong sales of its budget lineup.

The South Korean tech giant accounted for a 19 per cent share of the global smartphone market in 2025, up 1 percentage point from a year earlier, according to the data compiled by industry tracker Counterpoint Research.

U.S.-based Apple took the top spot with a 20 per cent share in 2025, up 2 percentage points from the previous year.

—IANS

na/