Xilinx Inc. has filed a lawsuit in a California court against Flextronics International Ltd., alleging the contract manufacturer resold chips it purchased from the semiconductor vendor at a premium to other customers. The FPGA manufacturer also charged Flextronics with dealing in “gray market and counterfeit” Xilinx products, according to the filing with the Superior Court of California, County of Santa Clara.
In the case, file number 1-13-CV-257431, filed on behalf of Xilinx by the law firm of Cotchett Pitre & McCarthy, Xilinx said chips that were previously purchased from its inventory by the electronics manufacturing services provider were resold to Checkpoint Systems Inc., one of its current customers that normally pays up to $4.50 more per unit for the same products.
“Many of these devices are incorrectly remarked in order to appear to be more expensive, higher performing devices in order to sell for a higher price. Because some of these devices are defective, Xilinx incurs additional damages upon the warranty-mandated replacement,” the complaint said.
Flextronics is a customer of Xilinx, according to the chipmaker’s lawyers and, as a result, the EMS provider gets preferential pricing for components it buys from the San Jose, Calif.-based company.