IBM, GlobalFoundries Settle Respective Lawsuits

Legal hostilities between two big name tech firms has been ended, after GlobalFoundries and IBM announced they have settled their respective lawsuits.

Both firms announced on Thursday that “the two companies have reached a settlement in their ongoing lawsuits, resolving all litigation matters, inclusive of breach of contract, trade secrets and intellectual property claims between the two companies.”

The details of the settlement are apparently confidential, and both parties have expressed satisfaction with the outcome.

Lawsuits settled

Both firms stated in the announcement that this settlement marks the end of an ongoing legal dispute and allows the companies to explore new opportunities for collaboration in areas of mutual interest.

“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,” added Arvind Krishna, Chairman and CEO of IBM.

Foundry purchase

The bad blood between the two firms stems back a number of years.

In 2015 IBM had admitted defeat in its efforts to crack the semiconductor business, and actually paid Globalfoundries $1.5 billion to take over IBM’s loss-making chip-making operation.

As part of that deal, GlobalFoundries agreed to supply Power processors in return for access to IBM manufacturing process intellectual property, as well as the physical assets of IBM Microelectronics.

It should be noted that back then, GlobalFoundries had placed little or no value on IBM’s factories due to their age.

GF is a contract chip maker and is the third-largest semiconductor manufacturer in the world (by revenue), after it was spun out of AMD’s former microprocessor business back in 2009.

GlobalFoundries used to be a unit of Abu Dhabi’s state-owned fund Mubadala until an initial public offering (IPO) in October 2021.

Bad blood

IBM sued the Malta, N.Y.-based GF in New York state court in 2021 for allegedly breaking a $1.5 billion contract to make high-performance chips for IBM.

Then in June 2021 GlobalFoundries sued IBM and asked a US judge to rule that it did not violate a contract with Big Blue, after the tech veteran had claimed $2.5 billion in damages.

Essentially Big Blue had alleged that GlobalFoundries violated a manufacturing agreement that was reached in 2015 between the two parties.

Then in 2023 GlobalFoundries separately sued IBM in a New York federal court for allegedly misappropriating its chip-making trade secrets and sharing them with Intel and Japanese consortium Rapidus during partnerships with the two companies.

Now it seems that both sides have agreed to set aside their respective legal actions with each other.