MStar Semiconductor Inc (晨星半導體), the world’s biggest supplier of chips for LCD TV sets, is suing touch sensor maker FocalTech Corp (敦泰科技) in China, claiming that it has hampered market competition by spreading rumors.
MStar has filed suit with a district court in Shenzhen through its local subsidiary and sought compensation from FocalTech for business losses and damage to its reputation, it said in a filing to the Taiwan Stock Exchange.
“FocalTech has repeatedly spread rumors that MStar has infringed its touch sensor patents, citing some unspecified reports,” MStar chief financial executive Lin Han-fei (林翰飛) said by telephone. “This is not true and has hampered market competition.”
The Hsinchu-based chipmaker said it might take further legal action if FocalTech persists in spreading rumors.
MStar entered the touch sensor market in 2011 and has made significant progress in expanding its business in China, becoming one of the nation’s three-biggest suppliers of touch sensor for smartphones and competing directly with FocalTech, Lin said.
MStar owns at least 50 touch sensors-related patents, Lin said.
In response, FocalTech spokesman Pai Pei-lin (白培霖) said: “We have not received any formal [court] notification yet.
“We do not expect to see any significant market share loss from this move,” Pai said by telephone.
FocalTech has a 50 percent share of China’s smartphone touch sensor market, making it the biggest touch sensor supplier there, Pai said.
In July, FocalTech received approval from the Taiwan Stock Exchange Corp to launch its initial public offering on the local stock market by the end of this year. The listing price is temporarily set at NT$250 per share.
FocalTech posted a net profit of NT$791 million (US$26.9 million), or NT$19.71 per share, for the first half of the year, according to the company’s financial statement posted on its Web site. Last year, it made a profit of NT$38.57 per share last year, compared with NT$11.42 per share in 2011.
The company was founded in 2005 by James Hu (胡正大), a former senior executive with Taiwan Semiconductor Manufacturing Co (台積電). It counts China’s major smartphone makers Huawei Technologies (華為), ZTE Corp (中興), Xiaomi Technology (小米) and Lenovo Group (聯想) as its major clients.