TSMC v. SMIC Trade Secrets Case Settles: $200 Million Plus Plus Goes to TSMC and SMIC CEO To Resign

LegalPad, a law blog out in California, is reporting that the massive TSMC v. SMIC has settled.

SMIC has agreed to pay TSMC $200 million and an undisclosed amount of stock and warrants, Keker & Van Nest partner Jeff Chanin acknowledged. Chanin and his firm represented TSMC in the matter. TSMC needs to get approval from the Taiwanese government to obtain the SMIC shares, a TSMC spokesman said.

TSMC won big during the liability phase with the jury finding that SMIC stole trade secrets and broke a previous settlement agreement. Chanin said that pursuant to stipulations by both parties a judgment was entered in favor of his client TSMC on all claims and counterclaims.
The two sides were in the midst of the damages phase when the court announced the settlement Monday morning.

Additionally, SMIC announced the resignation of its chief executive, a few hours after the China-based chip maker said it would pay rival TSMC $200 million as part of a deal to settle the legal dispute. SMIC's announcement that founder Richard Chang has stepped down marks the latest twist in China's struggle to build a semiconductor industry, and caps Mr. Chang's effort to build a cornerstone of that industry that could compete with more established overseas rivals like Taiwan's TSMC. Mr. Chang resigned to pursue personal interests, SMIC said in a statement, without elaborating.

SMIC said David N.K. Wang would succeed Mr. Chang. Mr. Wang is an industry veteran who has worked at several companies, including a lengthy stint at Applied Materials Inc.

That's a whopper of a settlement even in the face of possible expert testimony establishing perhaps billions in damages. Goodbye Mr. Chang, hello Mr. Wang.