TAIPEI, TAIWAN: TSMC, the world's biggest contract chipmaker, dismissed in a statement recent media reports that it will intervene in SMIC's operations or join the Chinese rival's board.

SMIC, China's largest contract chipmaker, said last week it will pay $200 million and give the right to purchase up to 10 percent of the company to Taiwan's TSMC to settle lawsuits between the two.

Some local newspapers said the move could pave the way for TSMC to beef up its presence in China by joining hands with SMIC.

"Our settlement with SMIC is aimed at the protection of TSMC's intellectual property and trade secrets," TSMC General Counsel Dick Thurston said in a statement issued late on Friday.

"The Settlement Agreement clearly provides that TSMC will not be involved in SMIC's operations, and will not be entitled to any position on SMIC's Board of Directors or in the management of SMIC. All reports in the press and other media to the contrary are completely unfounded."

TSMC also said it would obtain those SMIC shares only if permitted by the Taiwan government.