Taiwan Semiconductor Manufact-uring Co (TSMC, 台積電), the world's largest maker of made-to-order chips, expanded a patent infringement suit against a Chinese foundry startup by filing fresh evidence to a US court yesterday.
TSMC's latest move was in response to Semiconductor Manufacturing International Corp's (SMIC,中芯國際集體電路) efforts to dismiss the claims of trade-secret misappropriation and unfair competition filed by TSMC in a US federal Court in December last year.
Among the new evidence, one former employee of SMIC said he witnessed the Chinese foundry's wrongdoings. One witness estimated that 90 percent of SMIC's 0.18-micron logic process was copied from TSMC, according to TSMC's filing.
"We will continue the evidence-collecting efforts," TSMC said in a statement.
The Taiwanese chipmaker filed a lawsuit against SMIC over intellectual property piracy in December last year with the US District Court Northern California accusing SMIC of infringing patent rights by hiring more than 100 former TSMC engineers.
"TSMC's move will be a stronger reminder to SMIC's shareholders that the Chinese company is besieged with legal problems and a hint that SMIC may lose the legal battle," said Patrick Wang (
But TSMC's expansion of the lawsuit is unlikely to trigger panic selling of SMIC's shares as the lawsuit was already factored in, Wang added.
Share prices of SMIC, the world's No.5 chipmaker, rose 2.2 percent to HK$2.32 on Hong Kong's blue-chip Heng Seng Index yesterday, but were still 13 percent down from their debut price of HK$2.69 last week.
Despite the seemingly minor effect on SMIC's shares, Roger Lin (
Commenting on TSMC's legal action, Lin said it was a necessary step for the local chipmaker to maintain its long-term dominance in the foundry industry by slowing the smaller Chinese competitor's technological progress.
"I think TSMC is feeling the increasing pressure from SMIC, which plans to grab a share of the US$3 billion Chinese semiconductor market, despite the lead in technology," Lin said.
The worldwide semiconductor industry is expected to continue to gain momentum this year, with global semiconductor sales rising to US$217 billion, a 22.6 percent increase from last year, according to preliminary quarterly estimates by research firm Gartner Inc released last month.
TSMC shares rose NT$3, or 5.45 percent, to end at NT$58 on the TAIEX yesterday following the announcement of a share buyback plan.
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