IBM, GlobalFoundries End Legal Battle Over Chip Tech Shared with Intel, Rapidus

GlobalFoundries and IBM have successfully resolved their ongoing legal disputes, which include issues related to contract breaches, trade secrets, and intellectual property rights. The companies achieved this resolution through a confidential settlement agreement, paving the way for potential future partnerships.

The legal battles between IBM and GlobalFoundries were extensive, involving claims of failed contractual commitments by GlobalFoundries and improper use of intellectual property by IBM. These issues stemmed from a 2015 transaction in which IBM divested its semiconductor manufacturing operations to GlobalFoundries. As a part of this agreement, IBM paid GlobalFoundries $1.5 billion to assume control of its microelectronics division and committed to further developing sophisticated process technologies for IBM’s mainframe processors and other products.

However, by 2018, GlobalFoundries discontinued its development of cutting-edge production nodes, citing a lack of sufficient demand from major clients to warrant the multi-billion dollar investments required. This decision left them without the capability to produce 7nm-class process technology necessary for IBM’s Z processors, leading to IBM’s 2021 accusation that GlobalFoundries failed to fulfill their agreement. IBM contended that this failure deprived them of the high-performance processors essential for their mainframe operations and sought remedies for the resultant damages and business disruptions.

In a counter lawsuit filed in 2023, GlobalFoundries accused IBM of improperly sharing sensitive intellectual property with third parties, including Intel and Rapidus. This intellectual property pertained to advanced process technologies that were co-developed with GlobalFoundries. The chip manufacturer argued that IBM had no right to disclose this information following the sale of its microelectronics division, asserting that IBM stood to gain from licensing technologies that it no longer owned.

After a prolonged period of legal disputes, both companies declared a settlement this week. Although the specifics of the agreement are confidential, both IBM and GlobalFoundries are eager to look beyond the conflict and identify mutual areas for cooperation.

“We are thrilled to have reached a favorable resolution with IBM, and we are excited about the prospects of revitalizing our longstanding partnership to further enhance the semiconductor industry,” remarked Dr. Thomas Caulfield, president and CEO of GlobalFoundries.

“Settling these disputes marks a major advancement for our companies, allowing us to concentrate on future innovations that will advantage our organizations and our clients,” said Arvind Krishna, Chairman and CEO of IBM.