by CIO Staff

SMIC Widens Legal Battle With TSMC Countersuit

Sep 13, 20062 mins
IT Leadership

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China’s largest chip maker is seeking damages in U.S. court from rival Taiwan Semiconductor Manufacturing (TSMC) for alleged breach of contract, widening a legal battle with TSMC that erupted last month.

Semiconductor Manufacturing International (SMIC) accused its larger rival of seeking to discredit it and failing to act in good faith over the terms of an earlier lawsuit settled in 2005.

“TSMC … has undertaken a concerted effort since the previous lawsuits to discredit SMIC by making unfair and misleading accusations,” SMIC said in a filing to the Stock Exchange of Hong Kong on Wednesday. The chip maker says it has fully complied with the 2005 settlement.

Last month, TSMC revived a long-running legal battle with SMIC by suing the company for failing to uphold the 2005 agreement, which had ended with SMIC agreeing to pay US$175 million. TSMC contends that SMIC broke the agreement by continuing to use its trade secrets.

The original suit accused SMIC of hiring former TSMC employees in order to gain access to its trade secrets and technology. TSMC is the world’s largest contract chip maker, and has been in business for nearly 20 years. SMIC was established in 2000 by Richard Chang, a veteran of Taiwan’s chip industry.

TSMC spokesman J.H. Tzeng declined to comment, saying his company is reviewing SMIC’s complaint.

-Dan Nystedt, IDG News Service (Taipei Bureau)

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