Sat, Nov 18, 2006 - Page 11 News List

China's SMIC files countersuit against Taiwanese rival

BLOOMBERG

Semiconductor Manufacturing International Corp (SMIC, 中芯), facing a lawsuit by Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) in a US court over alleged breaches of an agreement, filed a suit in China against the Taiwanese company.

The Beijing High Court accepted the suit alleging "unfair competition arising from the breach of a bona fide principle and commercial defamation'' by TSMC, the Shanghai-based company said in a filing to the Hong Kong stock exchange yesterday.

SMIC, which is China's biggest made-to-order chipmaker, is seeking, among other things, an injunction to stop its larger rival's "infringing acts," a public apology and compensation, according to the statement.

SMIC's move is the latest in an ongoing legal tussle between the two companies. TSMC filed a suit on Aug. 25 in the California Superior Court of Alameda County, alleging SMIC didn't comply with an agreement inked in January last year that settled an earlier suit by the Taiwanese chipmaker, claiming the Chinese company had violated patents and trade secrets.

SMIC agreed last year to pay TSMC US$175 million in installments over six years to settle the earlier lawsuit, the Taiwanese company said in a release on its Web site.

That agreement included a cross-licensing accord until December 2010, according to the release.

The Chinese company on Sept. 13 responded with a cross-complaint in the US denying the allegations. TSMC on Oct. 12 filed a statement to the California Superior Court of Alameda County denying the allegations in the counter lawsuit.

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