IBM and Globalfoundries reach agreement in billion-euro legal dispute

The legal dispute between IBM's processor division and the chip contract manufacturer Globalfoundries (GF) lasted 3.5 years. Now both parties have reached an out-of-court settlement – Details unknown.

The differences have been simmering since 2014: when GF took over IBM's loss-making semiconductor plants, IBM added 1.5 billion US dollars. As a result, GF received 16,000 patents and a wealth of manufacturing expertise from the 5,000 employees it took over.

In return, GF was to work with IBM to develop manufacturing processes with structures of 14, 10 and 7 nanometers, which IBM wanted to use for its Power processors. However, this never came to pass: shortly after the deal, GF discontinued research into 10 nm, followed by the discontinuation of all even finer production generations in 2018.

IBM changed its roadmap for new Power processors and switched to Samsung as its chip contract manufacturer. The Power10 CPUs appeared delayed in 2021 with 7 nm structures – and with 16 instead of 24 planned cores per socket. The upcoming Power11 generation will remain with Samsung and 7 nm.

Claim worth billions settled

In 2021, IBM sued its former partner for 2.5 billion US dollars in damages. This was followed by a counterclaim from GF.

The two companies have since reached an out-of-court settlement and resolved the lawsuits. "The details of the settlement are confidential and both parties have expressed their satisfaction with the outcome", according to announcements from both sides. All legal disputes including breach of contract, trade secrets and intellectual property claims have been resolved.

The companies do not rule out future cooperation. IBM continues to maintain a small but renowned research team for new process technology, which works together with Samsung and Japan's Rapidus. This includes research into new types of transistors for 2 nm processes and beyond.

(mma)