Abstract
With the rapid advancement in technology, Taiwan’s integrated circuit (IC) design companies have made a mark in the international semiconductor industry but are unable to independently develop the key core technologies they need. Therefore, strategic alliances, competition and cooperation have become a means for enterprises to quickly obtain patents and capture the market. However, listed companies upstream and downstream of Taiwan’s supply chain have been facing patent infringement lawsuits in recent years. This research mainly aims to provide investors with investment strategies when companies face patent litigation, analyze the abnormal returns on the underlying stocks through the event research method, and use the cross-sectional multiple regression model to explore the changes in different factors based on the results. The empirical results show that positive abnormal returns are generated before and after a company faces patent litigation and the cumulative abnormal rewards are all positive and significant after the incident, which indicates that the company may still have an opportunity to make a profit when facing patent litigation, which can be used as a reference for investors.
Highlights
Taiwan’s information industry has the most complete industrial chain in the world
The data compiled in this study contain the following: (1) upstream integrated circuit (IC) design house samples selected from the industrial value information platform; (2) news about relevant events selected from the infringement lawsuits of plaintiffs; and (3) defendants of Taiwan’s listed semiconductor IC design houses from 2010 to 2020 on Unified Patent
The abnormal returns and cumulative abnormal returns of IC design houses in patent lawsuits are tested by the event study method and the date when patent lawsuits occur is set as the event day to examine the abnormal returns of IC design houses over the years
Summary
Taiwan’s information industry has the most complete industrial chain in the world. With a highly flexible build-to-order production model and integrated operations capacity, Taiwan’s information industry, constructed by independent firms supplying raw materials in the upstream sector, manufacturing and assembling in the midstream sector, and conducting operations and distribution in the downstream sector, forms a complete supply chain system with the advantages of rapid product development and mass production capabilities. The information industry supports research and development, design, the supply of components, original equipment manufacturer (OEM) contract assembly, and the operations and the global distribution of technological products, such as laptops, tablets, smartphones, and television (TV) panels, and meets changing market demands by accelerating the conversion of raw materials into final goods (Beamon 1998). Taiwan’s information industry provides the following services: the design and production of more than 90% of laptops, 70% of wafer foundry, and 50% of semiconductor packaging and testing services globally. This indicates its vital role in the global production and supply chain system of the high-tech information industry. Bloomberg’s 2020 report about the country-specific market share of semiconductor suppliers showed that the United States ranked first, with 42.9%, followed by Taiwan, at 19.7%, and South Korea, at 15.9%
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
