Xilinx (XLNX) Sues Flextronics (FLEX) Alleging Fraud, Misrepresentation
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Xilinx, Inc. (Nasdaq: XLNX) filed a lawsuit against peer Flextronics Int'l (Nasdaq: FLEX) alleging fraudulent practices.
Xilinx said that Flextronics gets its semiconductor chips at a discount based on misrepresentations of end users and then sells those chips at a substantial mark-up for profit.
Bloomberg noted that Xilinx said in its complaint,
One example given is Flextronics placing on order on behalf of Xilinx preferred customer Airvana Network Solutions, but the company selling the chips to Checkpoint Systems for as much as $4.50 more per chip.
Shares of Xilinx and Flextronics are flat in early trading Thursday.
Xilinx said that Flextronics gets its semiconductor chips at a discount based on misrepresentations of end users and then sells those chips at a substantial mark-up for profit.
Bloomberg noted that Xilinx said in its complaint,
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.
One example given is Flextronics placing on order on behalf of Xilinx preferred customer Airvana Network Solutions, but the company selling the chips to Checkpoint Systems for as much as $4.50 more per chip.
Shares of Xilinx and Flextronics are flat in early trading Thursday.
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