Fairchild Semiconductor plans to appeal ruling in ZTE lawsuit
Fairchild Semiconductor has announced it will appeal a judgment by the Intermediate People's Court of Shenzhen, Guangdong Province, People's Republic of China, in favour of Zhongxing Telecom Ltd. (ZTE). The judgment ordered Fairchild to pay RMB65,733,478 (approximately $8.4 million at current exchange rates) to ZTE. Fairchild Semiconductor maintains that the product liability claims are invalid. Fairchild will appeal to the Higher People's Court of Guangdong Province.
The lawsuit relates to alleged defects in products shipped in late 2002 and early 2003. Fairchild did not sell the allegedly defective products to ZTE directly. Among other defences, Fairchild has argued that limitations on damages in its contract with its distributor at the time of shipment should limit any damages recovery by ZTE.Fairchild expects to record a charge of approximately $8.2 million in the fourth quarter 2006 related to this legal proceeding.