GlobalFoundries and IBM reported this week that they settled two lawsuits accusing GlobalFoundries of breach of contract with IBM. And in which the latter allegedly misused the chipmaker’s trade secrets.
Reuters news agency reported. The companies said in a joint statement that the settlement terms were confidential. And that the deal would allow them to explore new opportunities for cooperation.
GlobalFoundries took over IBM’s chip factories in 2014 after it stopped producing chips. However 2018, GlobalFoundries stopped developing advanced chip technology because of high development costs. IBM then engaged Samsung Electronics to make its chips.
Breach of contract by GlobalFoundries
According to the filing, IBM remained silent for nearly two and a half years after the changes in 2018 and did not send a letter to GlobalFoundries until April 2021, claiming that the chip manufacturer had breached the agreements. IBM then sued Malta- and New York-based GlobalFoundries in New York state court in 2021 because it had allegedly broken a $1.5 billion contract to make high-performance chips for IBM.
GlobalFoundries, majority-owned by Abu Dhabi-based sovereign wealth fund Mubadala, also filed a lawsuit. In turn, it separately sued IBM in 2023 in federal court in New York because IBM allegedly misappropriated chip manufacturing secrets and shared them with Intel and Japanese consortium Rapidus during partnerships with the two organizations.
An Intel spokesman did not want to comment on the settlement, and Rapidus’s spokespersons did not immediately respond to a request for comment.
In November, the U.S. Department of Commerce awarded GlobalFoundries a $1.5 billion grant to expand its semiconductor production in New York and Vermont.