Chipmaker Qualcomm Inc has escalated
its patent battle with Apple Inc, suing Foxconn and
three other Taiwanese manufacturers that supply iPhone and iPad
components for not paying royalties.
Apple filed a lawsuit against Qualcomm in January, accusing
it of overcharging for chips and refusing to pay some $1 billion
in rebates - a move that came days after the U.S. government
accused the chipmaker of using anticompetitive tactics to
maintain a monopoly over key semiconductors in mobile phones.
Qualcomm has called Apple's suit baseless and has said the
iPhone maker was encouraging regulatory attacks on its business.
On Wednesday, Qualcomm said in its complaint that Apple had
advised the four contract manufacturers to withhold royalty
payments and agreed to indemnify them against any damages
resulting from the breach of their agreements with Qualcomm.
It did not disclose the sum of the alleged unpaid royalties
in the complaint which was filed in the United States District
Court for the Southern District of California. Qualcomm is
seeking an order for the suppliers to comply with contractual
obligations as well as damages.
Foxconn, formally known as Hon Hai Precision Industry Co and
one of Apple's main suppliers, said it had not yet received
documents regarding the lawsuit and declined further comment.
Wistron Corp also said it had not received the
relevant documents. Pegatron Corp declined to comment,
while Compal Electronics Inc did not offer immediate
Last month, Qualcomm slashed its profit and revenue
forecasts for the current quarter, saying it excluded revenue
receivable from the four contract manufacturers.
Qualcomm, the largest maker of chips used in smartphones,
said in its filing that Apple is trying to force the company to
agree to an "unreasonable demand for a below-market direct
Apple reiterated that it had been trying to reach a
licensing agreement with Qualcomm for more than five years but
the company has refused to negotiate fair terms.
Qualcomm's shares fell 1 percent to $55.36 on Wednesday
while Apple's shares slid 3.4 percent to $150.25.
Shares in the Taiwanese suppliers fell between 0.4 percent
and 2 percent in early Thursday trade except for Compal which
rose 1.5 percent.
(Additional reporting by Jess Macy Yu in Taipei)