SMIC asks court to reject rival chipmaker's lawsuit Semiconductor Manufacturing International Corp (SMIC) has asked a California court to dismiss a lawsuit by rival Taiwan Semiconductor Manufacturing Co (TSMC), saying its claims of patent infringement are without merit. 'The [intellectual property] that they claim we have infringed on is not the IP that we use,' chief financial officer Jenny Wang said yesterday. In December, TSMC, the world's largest contract chipmaker, accused its mainland rival of poaching more than 100 staff to gain access to TSMC patents and build its technology know-how. Ms Wang did not say when the motion to the US District Court of Northern California was filed. She said the court had yet to respond. Ms Wang said the firm had consulted Deloitte Touche and outside counsel to gauge the potential financial impact of the lawsuit. 'There is no need to make any kind of damage reserve at this time,' she said, although SMIC was setting aside money to cover legal costs. Ms Wang made the remarks yesterday while promoting SMIC's US$1.79 billion initial public offering (IPO), which opens to retail investors today. Chairman and chief executive Richard Chang said TSMC's suit - which many industry watchers said was timed to interfere with SMIC's IPO - had not hurt its business. Mr Chang said the company had signed up four integrated device manufacturers as customers since the suit was filed, and more than 20 'fabless' customers. 'We did not lose [any customers]. Business continues to remain strong,' he said. In its suit, TSMC alleged SMIC had infringed upon its intellectual property to manufacture semiconductors for Broadcom, a US-based maker of broadband chips. Ms Wang also sought to address concerns SMIC would be returning to the market soon to cover its huge capital expenditure needs, estimated at US$3.32 billion over the next two years. She said SMIC would receive US$1 billion from its IPO, its operations were expected to generate $1.7 billion in cash, it had $500 million available from existing credit lines and $450 million cash on hand. 'That should be sufficient to cover our funding needs,' she said. SMIC is building a 12-inch wafer facility in Beijing and has earmarked US$400 million for the plant this year and $770 billion next year. Mr Chang said SMIC would begin to move in equipment in the second quarter, with pilot production to follow in the third quarter. He said a troubled eight-inch wafer plant in Tianjin acquired from Motorola in January would begin to see a turnaround this year. Mr Chang also played down concerns the company could run into trouble next year, when many observers expect the global semiconductor cycle to peak. The China market was growing at twice the pace of the global industry, he said. Mr Chang estimated 55 per cent of SMIC's output this year would be delivered to its customers' mainland operations.