Royal Philips NV yesterday said that it had reached a US$1.1 billion deal to settle US lawsuits over faulty sleep machines that have dogged the Dutch medical device maker.
The company’s shares soared more than 45 percent on news of the settlement, which was less onerous than feared by some shareholders.
Philips has been battling a series of crises since 2021 over its DreamStation machines for sleep apnea, a disorder in which breathing intermittently stops during sleep.
Photo: ANP/AFP
Millions of devices were recalled over concerns that users were at risk of inhaling pieces of noise-canceling foam and fears it could potentially cause cancer.
The company earlier this year decided to halt new sales in the US of the machines made by subsidiary Philips Respironics.
The company has reached an agreement with the plaintiffs “to resolve the personal injury litigation and the medical monitoring class action to end the uncertainty associated with litigation in the US,” Philips said in a statement.
The company said it did not “admit any fault or liability, or that any injuries were caused by Respironics’ devices.”
The agreement addresses claims filed in US courts and other potential cases, it added.
“Patient safety and quality is our highest priority, and we have taken important steps in further resolving the consequences of the Respironics recall,” Philips chief executive Roy Jakobs said in the statement.
“The remediation of the sleep therapy devices for patients is almost complete, and the test results to date show the use of these devices is not expected to result in appreciable harm to health,” Jakobs added.
“We do regret the concern that patients may have experienced,” he said, adding that the settlements were “significant milestones and provide further clarity on the way forward for Philips.”
Philips, which has had to cut thousands of jobs, posted a loss of 463 million euros (US$496 million) over the full year last year.
It yesterday reported a loss of 824 million euros in the first quarter of this year on sales totaling 4.1 billion euros.
Philips said the settlement payments are expected to take place next year and would be funded through cash-flow generation.
The company said it booked a provision of 982 million euros in the first quarter to cover the settlement.
Philips said it also concluded an agreement with insurers to pay Philips 540 million euros to cover Respironics recall-related claims.
“The three biggest litigation cases that we had are now put behind us,” Jakobs said in a conference call.
“We can move on and that’s very important,” he said, while cautioning that it “doesn’t mean that everything is resolved.”
ASML Holding NV’s new advanced chip machines have a daunting price tag, said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), one of the Dutch company’s biggest clients. “The cost is very high,” TSMC senior vice president Kevin Zhang (張曉強) said at a technology symposium in Amsterdam on Tuesday, referring to ASML’s latest system known as high-NA extreme ultraviolet (EUV). “I like the high-NA EUV’s capability, but I don’t like the sticker price,” Zhang said. ASML’s new chip machine can imprint semiconductors with lines that are just 8 nanometers thick — 1.7 times smaller than the previous generation. The machines cost 350 million euros (US$378 million)
EXPLOSION: A driver who was transporting waste material from the site was hit by a blunt object after an uncontrolled pressure release and thrown 6m from the truck Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) said yesterday there was no damage to its facilities after an incident at its Arizona factory construction site where a waste disposal truck driver was transported to hospital. Firefighters responded to an explosion on Wednesday afternoon at the TSMC plant in Phoenix, the Arizona Republic reported, citing the local fire department. Cesar Anguiano-Guitron, 41, was transporting waste material from the project site and stopped to inspect the tank when he was made aware of a potential problem, a police report seen by Bloomberg News showed. Following an “uncontrolled pressure release,” he was hit by a blunt
Quanta Computer Inc (廣達), which makes servers and laptop computers on a contract basis, yesterday said it expects artificial intelligence (AI) devices to bring explosive growth to Taiwan’s electronics industry, as AI applications are starting to run on edge devices such as AI PCs. Taiwanese electronics manufacturers such as chipmakers, component suppliers and hardware assemblers are likely to benefit from a rapid uptake of AI applications, Mike Yang (楊麒令), president of Quanta Cloud Technology Inc (雲達科技), a server manufacturing arm of Quanta, told reporters on the sidelines of a technology forum in Taipei yesterday. “I believe the growth potential is promising once
RETALIATION: Beijing is investigating Taiwan, the EU, the US and Japan for dumping, following probes of its market, as well as tariff hikes on its imports The Chinese Ministry of Commerce yesterday said it had launched a dumping investigation into imports of an important engineering chemical from Taiwan, the EU, the US and Japan. It would probe imports of polyoxymethylene copolymer, a thermoplastic used in many precision parts used in phones, auto parts and medical equipment, the Chinese commerce ministry said. The ministry is reviewing materials provided by six Chinese companies that applied for assistance on behalf of the industry on April 22, it said. The probe will target polyformaldehyde copolymer imported from suppliers in the EU, the US, Taiwan and Japan last year, and will assess any damage