Semtech Investigates Faulty IC Claim

August 27, 2002 by Jeff Shepard

Semtech Corp. (Camarillo, CA) announced that it is in discussions with an undisclosed customer to resolve a dispute over whether a Semtech IC caused failures in some units of two models from the customer's products. The customer claims to have suffered damages of about $42.0 million and has projected that damages may eventually exceed $115.0 million.

The customer spent about $550,000 on the IC at issue, however, Sematech reported that the purchase accounts for about one percent of its third-quarter sales. Semtech also reported that the customer has so far provided no documentation of its technical or financial contentions, and that the companies have been unable to replicate the problem. Semtech stated that extensive testing so far shows that the IC functions reliably, and that Semtech has cooperated fully with the customer, has freely shared access to its reliability testing data, and has conducted other tests requested by the customer.