Monday, December 1, 2008

Fairchild Semiconductor sues Infineon for patent infringement

By Efrain Viscarolasaga

South Portland, Maine-based chip maker Fairchild Semiconductor International Inc. has filed a patent infringement lawsuit against competitor Infineon Technologies AG of Germany.

The suit, which was filed in the Maine and Delaware districts of the U.S. District Court, alleges Infineon’s CoolMOS and OptiMOS branded power management products infringe on “one or more of eight Fairchild patents.”

The two companies had recently been engaged in cross-license negotiations, but the talks have escalated into litigation, according to a Fairchild Semiconductor (NYSE: FCS) statement.

According to published reports in Reuters and other outlets, Infineon claims the allegations are a response to its own suit filed against Fairchild earlier this year.

In an August market report by IMS Research, the overall power semiconductor market in 2007 totaled about $13.6 billion; Infineon boasted the largest market share with about 9.7 percent of the market, while Fairchild was reported to have the third largest share of the market, at 7 percent.

The suit comes on the heels of Fairchild Semiconductor’s third quarter financial reports, which show the company generating $428.3 million in revenue, a $1.5 million increase over the same period last year. In conjunction with its quarterly report, the company also reduced its fourth quarter guidance to revenue of between $338 million and $360 million, a sequential decline of 16 percent to 21 percent from the third quarter, and a 1 percent reduction of its previous projections.