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Monday, April 9, 2012
STMicroelectronics To Pay $59 million to NXP
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STMicroelectronics on April 5, 2012, had been ordered to
pay approximately $59 million to NXP Semiconductors,
following an award from an arbitration tribunal set up
according to the rules of the International Chamber of
Commerce (ICC).
The award concerns a dispute between ST and NXP and
relates to a claim by NXP against ST for underloading
charges to be included in the price of wafers which NXP
supplied to ST's wireless JV from October 1, 2008 until
December 31, 2009.
ST said it was disappointed with the results of the
unexpected arbitration. However, the company is
encouraged by the fact that in its award the ICC Tribunal
states that it has chosen not to address certain issues
which ST has raised, and that will be part of a second
arbitration before the same ICC tribunal. A hearing for
this second arbitration is scheduled in June 2012 with a
final decision expected during the following twelve
months.
"ST intends to vigorously pursue its claims in this
second arbitration aiming to convince the ICC Tribunal to
reverse the economic effect of its award in the first
arbitration," the company said in a statement.
This award will be recognized in ST's first quarter 2012
results and is currently estimated to have a negative
impact on its cost of sales. This will in turn negatively
impact ST's gross margin by approximately 2.6 percentage
points. Consequently, the company lowered its previously
indicated guidance for the first quarter as a result of
this unexpected exceptional charge to about 30.4%, plus
or minus 1.5 percentage points. |
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