Taipei, Aug. 27 (CNA) Shares of Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chipmaker, showed gains Tuesday, although the company is facing lawsuits over allegations of patent infringements, dealers said.
TSMC shares gained 0.60 percent to close at NT$250.00 (US$7.96) on the Taiwan Stock Exchange (TWSE), with 50.21 million shares changing hands on the local main board, where the benchmark weighted index ended up 0.32 percent at 10,387.23 points.
The stock helped to anchor the broader market, which staged a technical rebound, dealers said.
Soon after the local equity market opened, TSMC shares attracted bargain hunting, as investors took cues from 0.95 percent increase in the company's American depositary receipts (ADRs) on the U.S. markets overnight, and the stock remained strong until the end of the session, dealers said.
On Monday it was reported that U.S.-based contract chipmaker GlobalFoundries had filed lawsuits in federal courts in the U.S. and Germany, accusing TSMC of stealing its patents, and had also lodged a petition with the U.S. International Trade Commission (USITC) making similar allegations.
According to international business wires, the lawsuits also named TSMC's clients that use its chips, including Apple Inc., Broadcom Inc., Qualcomm Inc., Xilinx Inc., Nvidia Corp., and their customers such as Cisco Systems Inc., Google and Lenovo Group Ltd.
In the lawsuits and USITC petition, GlobalFoundries is seeking an import ban on TSMC chips, which could roil the market for crucial processors used in a wide range of electronics gadgets, including the iPhone, according to the reports.
The U.S. and Germany have been the major markets for GlobalFoundries, which has invested more than US$15 billion in the U.S. and US$6 billion in European markets over the past decade, market analysts said.
TSMC, meanwhile, said Monday that it had not received any legal notice of the lawsuits.
However, the company said, it was capable of developing new technologies and had always respected intellectual property rights.
In a corporate social responsibility report filed with the TWSE in 2018, TSMC said it had been increasing its research and development spending to upgrade its technologies and maintain its lead over its competitors. In 2018, TSMC's R&D spending was US$2.85 billion, accounting for 8 percent of its revenue.
Earlier this month, TSMC's board of directors approved a NT$200.91 billion fund to set up new production lines, improve the company's technologies, and establish specialty technology capacity.
According to a recent research paper issued by market information advisory firm IC Insights, TSMC has replaced South Korean memory chipmaker SK Hynix Inc. as the third largest semiconductor supplier in the world.
In the first half of the year, TSMC's revenue totaled US$14.85 billion, surpassing Hynix's US$11.56 billion, according to the paper.
The legal action by GlobalFoundries is unlikely to significantly affect the operations of TSMC, which holds more than a 50 percent share of the global wafer foundry market, market analysts said.