STMicro to pay $59 mn to NXP, orders arbitrator

SAN FRANCISCO, USA: An arbitration tribunal has ordered STMicroelectronics NV to pay about $59 million to NXP Semiconductors BV to settle a dispute over charges for wafers NXP had supplied to ST’s wireless joint venture in 2008 and 2009, reports Dylan McGrath of EETimes.

ST has asked the tribunal to set up rules according to the International Chamber of Commerce (ICC).  

ST expressed its disappointment over the results of the arbitration and it was quite unexpected for the company. As per ST, the tribunal chose not to address certain issues raised by ST. Though those issues have not been specified by ST but it would be a part of a second arbitration before the tribunal.

ST said, “We intend 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." ST is perturbed about the negative impact on the cost of the company’s sales in the first quarter financials.

The company expects the impact on its gross margin for the period by about 2.6 percentage points. The company lowered its margin guidance for the first quarter to between 28.9 per cent and 31.9 per cent.