News

Silicon Motion Initiates Arbitration Against MaxLinear

James L. Flint

• October 05, 2023

Silicon Motion Technology has recently filed an arbitration claim against MaxLinear for violating their merger agreement on May 5, 2022. The arbitration was submitted to the Singapore International Arbitration Center. Silicon Motion seeks a termination fee of $160 million, along with significant damages, interest, and costs.

Both parties are entitled to nominate an arbitrator, and these nominated arbitrators will then jointly select a third arbitrator. Silicon Motion Technology, based in Taipei, announced in August that it terminated the merger agreement with MaxLinear. This came after MaxLinear claimed to have terminated the agreement in July.

Silicon Motion intends to exercise its contractual rights under the merger agreement to hold MaxLinear accountable for substantial monetary damages far beyond the termination fee specified in the deal. This dispute between the chipmakers began on July 26 when MaxLinear invoked its right to terminate the agreement. MaxLinear cited unfulfilled closing conditions and Silicon Motion's handling of an ongoing material adverse event as reasons for termination.

In response, Silicon Motion promptly declared MaxLinear's termination as invalid, asserting that it was not experiencing any material adverse effects. Silicon Motion expressed its expectation that MaxLinear, headquartered in Carlsbad, California, would fulfill its obligations under the agreement. As of now, there has been no comment from a MaxLinear spokesperson.