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Mitac unfazed by US court ruling

Despite a plunge in its share price, Mitac International Corp (神達) said yesterday that business would not be adversely affected by a US International Trade Commission (ITC) ruling against the use of SiRF chips in its portable navigation device maker.

Shares of Mitac dropped 5.75 percent to NT$17.2 as investors feared the firm’s shipments to the US could be hampered by an import ban on its major GPS chip supplier SiRF Technology Inc, the result of an unfavorable patent lawsuit ruling.

“Based on a preliminary evaluation, the litigation will not likely produce any substantial impact on our product sales in the US,” Mitac spokeswoman Justine Chen (陳怡君) said by telephone yesterday.

“The ruling is not final and would go into effect only in February next year. We are now diversifying GPS chip suppliers, and SiRF plans to produce chips with a design to get around the problem by the end of the year,” Chen said.

An ITC judge in Washington on Tuesday recommended a ban on imports of some SiRF GPS chips after an initial ruling found that SiRF has infringed patents held by a subsidiary of rival Broadcom Corp.

SiFR has reportedly filed an appeal against the ruling.

About 80 percent of Mitac’s products are equipped with SiRF GPS chips, and 15 percent of Mitac’s overall shipments are to the US, Chen said. Europe is the company’s biggest export destination, accounting for 60 percent of shipments, she said.

“We are using a lot of SiRF chips, but we do not expect a substantial impact on Mitac’s shipments this year,” Chen said, adding that the company woulstick to its shipment target of 8 million units for the year.

SiRF will pay all damages stemming from the ruling based on the supply contract, Mitac said in a statement released yesterday.

Mitac-owned Mio, ranked No. 4 in the US’ portable navigation device market, grabbed a bigger slice of the share in the US, or 4.5 percent, in the second quarter by shipping 166,490 units, according to a report by market researcher Canalys.

A year ago, Mio held a 4.1 percent share and shipped 78,710 units, according to Canalys figures.
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