Nine companies involved in the bidding for semiconductor design software and related equipment have been sanctioned by the Fair Trade Commission (KFTC) for colluding to set winning bidders and bid prices over nearly 20 years. These companies secured 91 out of 95 targeted bids through practices such as using dummy bidders.
On November 15, the KFTC announced it would impose corrective orders and a total fine of 2.06 billion won (approximately $2 million) on the nine companies involved in the collusion related to bids for electronic design automation (EDA) software. The companies facing penalties include EDC, EDMC, EDMFG, Dahan Tech, Celoco, Soar Solution, ITEN, L-Tech, and Comtech System.
EDA software automates the design process for semiconductor chips, covering everything from logical design to placement, wiring, simulation, and verification. According to the KFTC, foreign manufacturers dominate 85% of the domestic market, with local companies primarily acting as distributors or agents for these foreign products.
The collusion lasted from February 2005 to October 2025. The Korea Electronics and Telecommunications Research Institute (ETRI) issued 49 of the 95 bids, with other clients including the Defense Acquisition Program Administration and the Korea Aerospace Research Institute. The total contract value for the colluded bids was approximately 6.2 billion won, with four contracts awarded to companies that did not participate in the collusion.
The KFTC noted that when competitive bids failed due to a single submission, the contracts often shifted to negotiated contracts, leading to lower final contract amounts. This indicated that the companies were using dummy bidders.
The representative of EDC holds significant shares in EDC, EDMC, and EDMFG, overseeing operations across all three companies. In bids involving only these three companies, the sales manager determined the winning bidder and dummy bidder, then sent the bid prices to the joint management team via email. The management team submitted bids according to the provided information.
In bids involving other companies, the firm primarily handling the requested products designated itself as the winning bidder and solicited a dummy bidder. The dummy bidder then submitted a bid based on the price communicated by the winning bidder via email.
The KFTC concluded that collusion to prevent bid failures could artificially inflate winning prices, increasing the burden on clients.
A KFTC official stated, "As we have significantly raised the minimum fines for unfair joint practices such as bid rigging, we plan to take stricter measures against similar violations in the future."
* This article has been translated by AI.
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