IBM, GlobalFoundries Settle Multibillion Trade Secret Lawsuit

The semiconductor companies IBM and GlobalFoundries have settled their litigation against one another, resolving a legal dispute over breach of contract and trade secret allegations between the two companies that could have cost either company billions of dollars.

The two companies announced the resolution of the dispute, although they decided to keep the details of the settlement confidential. Both parties stated that they are satisfied with the outcome, however. The legal dispute has been ongoing since 2021 due to a number of disagreements over production.

Globalfoundries' Thomas Caulfield

"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 GlobalFoundries president and CEO Thomas Caulfield.

IBM's Arvind Krishna

“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.

Why IBM and GlobalFoundries Were in Court

IBM initially filed a suit against GF regarding the foundry provider's delayed providing of 14-nanometer chips for them as well as 10 and 7nm chips as part of a larger agreement. GF contested this in court, calling IBM's claims baseless. This was followed by a 2023 lawsuit by GF in 2023, which alleged that IBM had unlawfully disclosed trade secrets and IP to its partners. GF also claimed that IBM was performing a "systemic poaching of GF's most qualified semiconductor manufacturing engineers in order to generate even more licensing revenue by enabling other companies with GF IP."

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Some believe that the common resolution between the two companies may be connected to ongoing partnerships between Intel and Rapidus, since the GF injunction in 2023 could have impacted both companies' roadmaps, according to The Register.

GlobalFoundries is in a particularly unique location since the Commerce Department believes that it is "one of "only four companies outside of China" that could provide foundry capabilities for current and mature process nodes on a necessary scale to support the Biden Administration's CHIPS Act. It was awarded $1.5 billion by the CHIPS Act in Nov. 2024 to help expand its fab options in the United States.