Feeds

SMIC coughs $175m to settle espionage allegations

TSMC prevails

  • alert
  • submit to reddit

Remote control for virtualized desktops

Chinese chip foundry SMIC has paid TSMC, the world's largest semiconductor producer, $175m to settle the legal action its Taiwanese rival launched against it last year.

TSMC will receive the money over a six-year period, with $30m coming in the first five years, followed by a final payment of $25m, SMIC said this weekend.

In addition to settling TSMC's lawsuit and SMIC's countersuit, the two will each get a five-year licence to the others' patents.

TSMC sued SMIC in December 2003, alleging its rival had engaged in industrial espionage. It accused SMIC of luring away its staff and encouraging other employees to spill the beans on upcoming products and technologies.

SMIC always denied the accusations, condemning TSMC's lawsuit as the action of a "bully".

This past summer, TSMC even asked the US Trade Commission to investigate its claims against SMIC with a view to banning the importation of SMIC-produced semiconductors. That request, like the lawsuits, has been rescinded as a result of the settlement.

What's interesting, however, is the admission that both patent cross-licence agreement and settlement "are terminable upon a breach by SMIC", the pair said, a course of action which "may result in the reinstitution of the legal proceedings and acceleration of the outstanding payments under the settlement agreement".

In short, TSMC is telling SMIC not to misbehave in future, an indication perhaps that it had sufficient evidence of malfeasance to force the settlement on its rival. Indeed, SMIC's announcement of the deal explicitly notes that "the settlement does not grant a license to use any of TSMC's trade secrets" - hardly the wording you'd expect the victor in such a case. ®

Related stories

Chips are down for Taiwan foundry giants
TSMC, UMC fab utilisation to plummet in Q4
TSMC asks US to ban SMIC chip imports
SMIC accuses TSMC of 'bullying' tactics
TSMC files 'verification' of SMIC spy claim
TSMC sues rival, alleging industrial espionage

Beginner's guide to SSL certificates

Whitepapers

Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
Getting started with customer-focused identity management
Learn why identity is a fundamental requirement to digital growth, and how without it there is no way to identify and engage customers in a meaningful way.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
The hidden costs of self-signed SSL certificates
Exploring the true TCO for self-signed SSL certificates, including a side-by-side comparison of a self-signed architecture versus working with a third-party SSL vendor.
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.