Fri, Jul 12, 2002 - Page 10 News List

MediaTek decides to stop attacking its own customers

By Dan Nystedt  /  STAFF REPORTER

MediaTek Inc (聯發科技) yesterday issued an apology for the apparent misunderstanding that it planned to investigate and possibly sue four of its customers.

"We were only trying to protect our intellectual property," Taiwan's second-largest microchip design house said in a statement.

MediaTek also said it took legal action against rival VIA Technologies Inc (威盛電子) last week.

VIA started a price war in order to gain market share and MediaTek contended that falling prices have shortened the amount of time MediaTek can reap reasonable profits for its chips.

MediaTek makes chips that drive CD-ROM, DVD-ROM and other optical-storage devices.

Sales at the company soared late last year as demand for DVD players surged. Its stock price rallied as well and rose to a high of NT$783 per share last April. Its stock fell NT$30 yesterday, ending at NT$408 per share.

Earlier this year, VIA began marketing a CD-ROM chipset in Taiwan. Its success prompted MediaTek to file suit against the company as well as one of its customers, AOpen Inc, last week. MediaTek contends that VIA infringed on two patents related to microchip technology used in optical-disc-drive technology and sought to bar AOpen from using the chips in its CD-ROM drives.

MediaTek followed with law-suits against three more companies, all its own customers and some of the biggest optical-drive makers in Taiwan -- BenQ Corp (明基電通), Behavior Tech Computer Corp (英群電腦) and EPO Science & Technology Inc (儀寶資訊).

BenQ, the company formerly known as Acer Communications and Multimedia, said that fallout from the investigation were unacceptable.

"The rumors of a lawsuit from MediaTek have caused unnecessary harm to BenQ's good reputation in the market ... if necessary, BenQ will not hesitate to take aggressive action to protect its reputation," the company said in a statement.

BenQ also received a visit from Taiwan's Bureau of Investigation, prompting its chief financial officer, Eric Yu (游克用), to say "We are quite upset with Mediatek and its confusing ways of dealing with customers."

MediaTek's chairman visited its customers yesterday while bearing gifts.

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