Sat, Dec 28, 2013 - Page 13 News List

TSMC ready for court battle over patent allegations

Staff writer, with CNA

Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) on Thursday said it would not shy away from a court battle after being accused of patent infringement by US-based Tela Innovations Inc.

Tela filed a complaint with the US International Trade Commission on Monday, accusing TSMC, the world’s largest contract chipmaker, of infringing on a patent for improving performance and power consumption in processors.

TSMC denied the charge, saying it is willing to take “appropriate legal action” to defend itself against the allegations.

TSMC did not elaborate, saying only that Tela was a partner in its open innovation platform but the cooperation between the two sides ended in May.

EXPIRING LICENSE

Tela’s claim is that TSMC applied its patent in the production of integrated circuits for a wide range of electronic products even though its license to use the technology expired in May.

The US firm alleges that TSMC violated Section 337 of the US Tariff Act of 1930 and is seeking a US import ban on TSMC-made chips using that technology.

INVESTORS UNCONCERNED

However, investors have shrugged off the threat of legal action, with TSMC’s stock — the most heavily weighted stock on the local bourse — rising 0.48 percent to close at NT$104.50 on the Taiwan Stock Exchange.

The benchmark weighted index ended up 0.57 percent at 8,535.04 points.

Market analysts said TSMC shares benefited from rotational buying as bargain hunters took advantage of its relatively low valuation after recent consolidation.

They said many investors still have high hopes that the chip giant will regain momentum in sales growth in the second quarter of next year as the global IC business stages a strong rebound following inventory adjustments.

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