Wiwynn, a server giant and subsidiary of Taiwan's semiconductor giant Wistron, has filed a lawsuit against billionaire Twitter owner Elon Musk, accusing him of refusing to pay $120 million for server parts and demanding $61 million in damages. Musk has faced multiple lawsuits since acquiring Twitter for a whopping $44 billion at the end of 2022.
Taiwanese media pointed out that according to the lawsuit filed by Wiwynn in the Northern District Court of California, the dispute originated from a procurement agreement signed in 2014, in which Twitter purchased customized IT products from Wiwynn.
However, as Musk took over the social platform in November 2022, Twitter suddenly stopped paying for completed products and ignored Weiying's repeated communications requesting payment by "reading but not replying".
Wiwynn went on to mention that they had accumulated up to $120 million worth of parts in order to fulfill orders from Twitter (now renamed X), but had made significant layoffs and cut spending after Musk took over, refusing to take responsibility for these actions.
Although Wiwynn successfully canceled and recovered about $59 million in parts, there was still $61 million left unpaid, so Twitter filed a lawsuit for compensation.
In fact, this is not the first time that Taiwan's major server manufacturers have encountered the controversy of Twitter "defaulting on its debts."
After Musk took over Twitter, he vigorously implemented a cost-reduction strategy. In addition to layoffs, he also renegotiated orders with suppliers. MiTAC Computer, one of its server suppliers, was also affected.
Based on conservative financial operation principles, MiTAC recorded NT$1.4 billion in inventory impairment and provision for accounts receivable losses in the fourth quarter of 2022. This move directly resulted in a loss of NT$346 million for MiTAC in that quarter, and a loss of NT$0.29 per share. This is the only second time MiTAC has suffered a single-quarter loss since its listing.
Since Musk acquired Twitter, Twitter has been hit with a series of lawsuits, ranging from accusations of not paying severance pay to advertiser boycotts. Whether as a defendant or a plaintiff, Musk has never been absent from the legal battlefield.
In addition to Wiwynn, former Twitter employees accused Musk of firing thousands of employees shortly after acquiring the company and owing them more than $500 million in severance pay.
However, U.S. federal judge Trina Thompson ruled that Twitter did not have a severance plan governed by the Employee Retirement Income Security Act, and therefore the court had no jurisdiction.
However, Musk was not to be outdone and hit back at some advertisers and major companies, accusing them of illegally boycotting Twitter.
The lawsuit targets food giants including Unilever and Mars, as well as companies including CVS Health and Orsted, which it says have cost Twitter billions of dollars in advertising revenue.
However, legal experts believe the lawsuit has little chance of success because it is difficult to prove illegal collusion between the companies.
