Patent dispute between Globalfoundries and TSMC resolved

October 29, 2019 //By Peter Clarke
Globalfoundries, TSMC resolve patents dispute
Rival foundries Globalfoundries and TSMC have announced a broad patent cross-license agreement and the dismissal of all litigation between them and their customers. It was not revealed whether one company had agreed to pay money to the other as part of the settlement, or how much.

Back in August 2019 Globalfoundries Inc. (Santa Clara, Calif.), the Abu Dhabi owned foundry chipmaker, filed multiple lawsuits against Taiwan Semiconductor Manufacturing Co. Ltd. (Hsinchu, Taiwan) alleging TSMC's manufacturing processes infringe 16 patents. A month later at the end of September TSMC, the foundry market leader, filed multiple law suits against rival GlobalFoundries Inc. alleging infringement of 25 patents.

The two companies have resolved their differences quickly and agreed a "life-of-patents" cross-license to each other's existing semiconductor patents worldwide patents as well as to all patents that both parties will file over the next ten years.

TSMC, which is riding high with strong sales of 7nm and other leading edge processes, could afford to pay quite significant sums to make the distraction of a legal dispute go away.

Globalfoundries on the other hand decided to abandon competing with TSMC at the leading-edge in 2018 (see Analysis: Outpaced by TSMC, GloFo cuts its cloth). As such it might be thought that Globalfoundries had more to gain and less to lose by pursuit of TSMC through the courts.

A spokesperson for Globalfoundries said both parties had agreed to keep additional terms of the settlement confidential.

However, the settlement does not necessarily end tension between the companies with regard to TSMC's sales practices while in a market dominant position. TSMC is reported to be under investigation by the European Commission (see Globalfoundries' Morgenstern: Diversity is key in Dresden). Globalfoundries' 2018 decision to end leading-edge FinFET manufacturing process development had been preceded by allegations that rival foundry TSMC was abusing its dominant position in the foundry market and preventing other foundries from competing (see Report: Globalfoundries asks China to probe TSMC and Report: GlobalFoundries accuses TSMC of unfair selling). TSMC has always denied the allegations and promised full cooperation with any legal inquiries.

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