The spat between Taiwan’s Taiwan Semiconductor Manufacturing Corp. and China’s Semiconductor Manufacturing International Corp.,with Irvine-based Broadcom Corp. in the middle,finally has reached an end.
The two contract chipmakers recently reached a settlement in their nearly yearlong patent dispute. According to the deal, SMIC will pay TSMC $175 million in the next six years.
TSMC said it would dismiss all legal complaints against SMIC in the U.S. and Taiwan. Both companies said they would license each other’s patents through 2010.
The suit centers on designs both companies are using to make chips under contract from Broadcom. Chip designers such as Broadcom that don’t have their own plants almost always contract with more than one factory so they can meet big orders quickly.
The dispute originally came to light earlier this year when SMIC reportedly received orders from Broadcom after the company moved some of its orders from TSMC.
TSMC reportedly was able to match some of the designs from SMIC products with some of its own. It filed a patent infringement lawsuit with the U.S. District Court in San Francisco and made a complaint to the U.S. International Trade Commission. Broadcom has declined to comment on the dispute, saying it’s between TSMC and SMIC.
Speaking of Broadcom
Scott McGregor only has been on the job for six weeks or so, but Broadcom’s chief executive already is getting good marks for his work at the company’s helm.
Some 68% of respondents said they thought McGregor was doing a good job in Forbes’ unscientific chief executive poll.
Another reason for the good showing on the poll: Two weeks ago, McGregor debuted on Wall Street as Broadcom reported a surge in profits for the fourth quarter. The company posted a net profit of $71 million for the quarter, miles above the year-ago quarter’s $6 million profit.
Sales for the quarter rose 12% from a year ago to $539 million, though revenue was down 17% from the third quarter.
An oversupply of chips,a scenario that appears to be fading,caused the sequential decline.
The fourth-quarter results brought McGregor’s first quarterly call with analysts as Broadcom’s boss. He most recently served as chief executive of Philips Semiconductors, a unit of Royal Philips Electronics NV, which recently reported a decline in earnings.
McGregor was tapped to lead Broadcom in October. He replaced Alan “Lanny” Ross, who himself replaced cofounder Henry “Nick” Nicholas in early 2003. Ross continues as a Broadcom director and led the company during the fourth quarter.
Analysts queried McGregor on where he thought the company would see growth. McGregor pointed to the company’s wireless and mobile chip divisions, which make wireless networking and Bluetooth chips for electronics such as portable computers and wireless phones.
“I’ve been spending a lot of time with the Broadcom team,” McGregor said. “I also met a large number at the CES trade show. As the new guy, it was a great opportunity to get some feedback. And I’m happy to report the feedback was positive.”
Acacia’s Latest License
Newport Beach-based Acacia Research Corp. recently said KY Data Systems, a subsidiary, recently entered into a licensing pact with France’s Thomson SA covering patents that apply to interactive TV.
The deal is the first to involve the stable of patents Acacia acquired in November when it bought Global Patent Holdings LLC. The deal gave Acacia control of 27 patent portfolios, including 121 U.S. patents and some foreign ones.
The acquired patents cover broadcast equipment, spreadsheet programs and credit card receipt processing, among others, Acacia said.
Part of Acacia’s business is buying patents and then pursuing licensing deals.
The Global Patent Holdings acquisition was said to “significantly expand and widely diversify our revenue-generating opportunities and would accelerate the execution of our business strategy of acquiring, developing and licensing patented technologies by two to three years,” according to Paul Ryan, Acacia’s chief executive.
Acacia paid $5 million upfront and is set to pay $2 million more in the next two years. It also gave Global Patent owners 3.9 million shares of Acacia stock,worth about $20 million at recent check.
Acacia already has made a good bit of money, first from its acquired V-Chip patents, which recently expired, and then from a patent for technology that streams video content over the Internet.
Analyst Up On FileNet
Forget that Costa Mesa-based FileNet Corp. missed analyst expectations last month.
KeyBanc Capital Markets analyst Mark Schappel told online news service MarketWatch, “We believe there is upside to the current numbers.” Schappel reiterated a “buy” recommendation on the stock with a $31 price target. Shares in the business software maker were trading at $22 at a recent check.
