Chipmakers Hire Armies of Lawyers to Boost Revenue Amid Slump

From:  Bloomberg, December 22, 2008

Chip companies are turning to armies of patent lawyers to bolster revenue amid the worst market for semiconductors since 2001.

Qimonda AG, LSI Corp and Spansion Inc. are among the chip companies using the U.S. International Trade Commission in Washington to try and block imports of rival products or garner patent royalties. The government agency has started investigating 42 intellectual-property complaints this year, the most since 1983.

“Lawyers are expensive, particularly patent lawyers in Silicon Valley, but it’s a great area to get money,” said Hans Mosesmann, a semiconductor analyst for Raymond James & Associates in New York. “You’re going to see more litigation and more aggressive maneuvering.”

Chipmakers, already reeling from plunging prices caused by overproduction, now face falling demand. Chip sales slid 4.4 percent this year, and will slump 16 percent in 2009, the first back-to-back decline on record, according to research firm Gartner Inc. in Stamford, Connecticut.

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