IBM and GlobalFoundries settle lawsuits over chipmaking tech given to Intel and Rapidus

GlobalFoundries and IBM have resolved all their legal disputes, including the ongoing lawsuits over contract violations, trade secrets, and intellectual property issues. The two companies signed a confidential settlement agreement, opening the door for future collaboration.

IBM and GlobalFoundries filed multiple lawsuits against each other. The lawsuits span from breach of contract obligations by GlobalFoundries to intellectual property usage by IBM. The conflict traces back to 2015 when IBM sold its semiconductor manufacturing business to GlobalFoundries. As part of the deal, IBM agreed to pay $1.5 billion to GlobalFoundries to take over its microelectronics operations and would continue developing advanced process technologies for IBM's processors for mainframes and other applications.

However, GlobalFoundries ceased to develop advanced production nodes in 2018 as it did not have enough high-profile clients to justify multi-billion investments. As a result, it did not have a 7nm-class process technology to make IBM's Z processors meet its partner's needs. As a result, IBM alleged that GlobalFoundries failed to deliver on its promises in 2021. IBM claimed that the semiconductor manufacturer left IBM without high-performance processors necessary for mainframes and sought compensation for damages and negative impact on its business.

In 2023, GlobalFoundries filed its lawsuit, accusing IBM of disclosing sensitive intellectual property to third parties, including Intel and Rapidus. The IP was related to next-generation process technologies and was developed together with GlobalFoundries, so according to the company, IBM had no right to share it after selling its microelectronics unit. The chipmaker argued that IBM could profit from licensing technologies it no longer owned by disclosing the IP.

After years of conflict, the two companies announced a settlement this week. While the terms of the agreement remain confidential, both IBM and GlobalFoundries expressed a desire to move forward and explore potential areas of collaboration.

"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 GF.

"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.