Nov. 10 (Bloomberg) -- Taiwan Semiconductor Manufacturing Co., the world’s largest custom-chipmaker, was awarded $200 million and an undisclosed amount of stock and warrants under an agreement with Semiconductor Manufacturing International Corp. to resolve a trade-secrets lawsuit, lawyers for the Taiwanese company said.

The settlement follows a Nov. 3 California state court jury verdict against China-based Semiconductor Manufacturing for improperly using trade secrets and breaching an earlier settlement with Taiwan Semiconductor.

A judge in Oakland, California, yesterday issued a judgment in favor of Taiwan Semiconductor and awarded it $200 million, pursuant to an agreement by both companies, said Amelia Hansen, a spokeswoman for the law firm Keker & Van Nest LLP. The San Francisco-based firm represented TSMC, as the company is known.

Other terms of the settlement are confidential, Hansen said in an e-mail. The judge’s order couldn’t be independently confirmed. Semiconductor Manufacturing had a third-quarter net loss of $69.3 million, the company said Oct. 28.

TMSC makes chips for mobile phones and medical equipment, among other uses. Companies such as Nvidia Corp. and Qualcomm Inc. order from it to avoid the expense of building chip factories.

2006 Lawsuit

TMSC’s U.S. unit sued its rival, China’s biggest chipmaker, in 2006 for allegedly causing more than $1 billion in damages by using 65 of its trade secrets and breaching a $175 million agreement reached in 2005, Keker’s Jeffrey Chanin, an attorney for the Hsinchu, Taiwan-based company, said in an Nov. 3. interview. That agreement resolved claims that Semiconductor Manufacturing earlier infringed trade secrets for chip-making processes, Chanin said.

Semiconductor Manufacturing, based in Shanghai, denied wrongdoing and said Taiwan Semiconductor breached its agreement to negotiate disputes over the settlement and sued to stifle competition, according to court filings in Oakland.

Calls to the offices of TSMC in San Jose, California, office and Semiconductor Manufacturing in Santa Clara, California, weren’t immediately returned.

The case is TSMC North America v. Semiconductor Manufacturing International Corp., RG06-286111, Alameda County Superior Court (Oakland, California).

To contact the reporter on this story: Karen Gullo in San Francisco at kgullo@bloomberg.net.

Last Updated: November 9, 2009 21:52 EST