China's Top Chip Maker to Pay $200 Million to TSMC Over Trade Secrets Dispute

Nov. 10, 2009

TSMC said Semiconductor Manufacturing International Corp (SMIC) had caused it more than one billion dollars in damages.

Taiwan Semiconductor Manufacturing Co (TSMC) said on Nov. 10 that China's top chip maker will pay it $200 million cash after they settled a long-running dispute over alleged theft of trade secrets.

The settlement appeared to put an end to the row, which started in 2006 when TSMC said Shanghai-based Semiconductor Manufacturing International Corp (SMIC) had caused it more than one billion dollars in damages.

"Pursuant to the new settlement, the parties have agreed to the entry of a stipulated judgment in favor of TSMC in the California action," TSMC, the world's largest contract microchip maker, said.

The settlement also led to "the dismissal of the SMIC appeal against the Beijing Higher Court's finding in favour of TSMC," according to the statement. TSMC's U.S. unit filed a suit in 2006, alleging that the Chinese company had used its trade secrets and breached a patent agreement reached in 2005.

The company did not provide details of the litigation, but it said the companies have also agreed to terminate the 2005 cross-licensing agreement.

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