IBM and semiconductor firm GlobalFoundries have settled a long-running dispute over intellectual property.
Back in 2015, GlobalFoundries – the chipmaking unit of AMD which was spun out in 2009 – took over IBM’s loss-making chip-manufacturing operation. It agreed to provide IBM with high-performance Power processors for mainframes and IBM’s Watson AI technology as the sole supplier over a ten-year period.
In return, GlobalFoundries was to be given access to some of IBM’s intellectual property, along with the physical assets of IBM Microelectronics. The deal saw IBM paying $1.5 billion to get rid of the manufacturing unit after failing to find a buyer.
However, in 2021, IBM filed a lawsuit against the company in New York state court, saying it was in breach of the contract by failing to supply the chips and asking for $2.5 billion in damages.
GlobalFoundries had halted the 7nm-class process technology required to make the processors for IBM, saying the size of its customer base didn’t make the process cost-effective.
Then, two years later, GlobalFoundries launched its own lawsuit against IBM in New York federal court, claiming that IBM had been misappropriating trade secrets related to next-generation process technologies and sharing them with Intel and Japanese state-backed consortium Rapidus.
GlobalFoundries said at the time that it was also concerned that the trade secrets might have been shared more widely. And, it said, IBM had made hundreds of millions of dollars in licensing fees as a result of these deals.
And, if that weren’t enough, the company claimed that IBM had been poaching some of its most qualified semiconductor manufacturing engineers.
Now, both disputes have been settled in a confidential agreement that, the firms said, covers all breach of contract, trade secrets, and intellectual property claims between the two companies.
“Resolving these disputes is a significant step forward for our companies and will allow us to both focus on future innovations that will benefit our organizations and customers,” said Arvind Krishna, chairman and CEO of IBM.
The two companies said they now plan to collaborate again in future.
“We are pleased to have reached a positive resolution with IBM, and we look forward to new opportunities to build upon our long-standing partnership to further strengthen the semiconductor industry,” said Dr Thomas Caulfield, president and CEO of GlobalFoundries.
In November, the US Commerce Department awarded GlobalFoundries $1.5 billion to increase production at its New York and Vermont plants, as part of a campaign to strengthen home-grown semiconductor manufacturing.
The company was, it said, one of only four companies outside China that had the capabilities to provide for current and future needs, and the only one headquartered in the US.
However, last year it was fined $500,000 under the Chips and Science Act for shipping chip components to a Chinese company in violation of sanctions.
