BEIJING, Nov. 9, 2009 (Xinhua News Agency) -- An unnamed official from Semiconductor Manufacturing International (SMIC)(SMI.NYSE; 0981.HK) has refuted the market hearsay that the company will have to compensate more than 1 billion US dollars to Taiwan Semiconductor Manufacturing (TSMC) after losing a lawsuit, according to Sina.com.
TSMC spokesman J. H. Tzeng said last Wednesday that TSMC (NYSE:TSM) won the lawsuit in California against SMIC (NYSE:SMI) on patents and trade secret in infringement, and TSMC will decide the compensation later.
However, the market rumor has been that SMIC may have to pay more than 1 billion dollars for compensation, an amount equalling to 92 percent of the company's total market capitalization, which amounted to about 1.08 billion yuan.
The anonymous SMIC official told c114.net that the reported compensation amount was inaccurate, and not the figure decided upon by the court.
The conflict between the two parties dates back to 2003. They had reached an agreement in 2005 that SMIC should pay 175 million dollars to TSMC over a period of six years.
However, TSMC filed a lawsuit in 2006, suing SMIC for breaching this agreement, which also prevented SMIC from using patents and trade secrets from TSMC to make semiconductor products below 0.13 nanometers. In the same year, SMIC also filed a lawsuit and accused TSMC for breaching the agreement and conducting unfair trading.
SMIC suspended trading on November 4. On the trading day of November 3, the company's stock on the NYSE went down 0.06 dollars, or 2.42 percent, to close at 2.42 dollars.
