IBM Corp. and leading global semiconductor manufacturer, GlobalFoundries Inc. announced on January 2, 2025, that they have reached a settlement in their years-long legal battle, resolving all litigation matters related to contract breaches, trade secrets, and intellectual property disputes. The settlement marks the conclusion of a contentious period and opens the door for the two companies to explore new collaborative opportunities in mutually beneficial areas.

Background of the Dispute

IBM sold its microelectronics business to GlobalFoundries in 2015, a deal worth $1.5 billion that included two fabs, over 16,000 semiconductor patents, and access to IBM's extensive chip development expertise. The agreement also required GlobalFoundries to supply IBM with processors over the next decade. However, tensions arose when GlobalFoundries decided in 2018 to halt the development of sub-10nm manufacturing nodes, which IBM argued violated their agreement.

In 2021, IBM sued GlobalFoundries for $2.5 billion, claiming damages from the failure to deliver promised technologies. GlobalFoundries countered in 2023 by accusing IBM of illegally sharing its proprietary technology and trade secrets with partners, including Intel Corp. and Rapidus Corp., a Japanese semiconductor company.

Recent Developments

Despite the legal battle, both companies have continued to innovate. IBM retained a semiconductor research center in New York after the 2015 deal and, in 2021, unveiled the world's first implementation of two-nanometer chip technology. IBM subsequently partnered with Rapidus to help commercialize the technology in Japan. Rapidus announced last month that it had achieved a key milestone with IBM in developing advanced manufacturing techniques for 2nm chips.

GlobalFoundries, a leading producer of silicon-germanium chips and legacy manufacturing nodes, alleged that IBM attempted to poach its engineers and unfairly benefited from licensing agreements. GlobalFoundries claimed exclusive rights to the technologies acquired in the 2015 transaction.

Moving Forward

In a joint statement, IBM and GlobalFoundries emphasized that the settlement allows both companies to refocus on innovation and collaboration. "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 Thomas Caulfield, CEO of GlobalFoundries.

IBM CEO Arvind Krishna echoed this sentiment, stating, "Resolving these disputes is an important step forward for our company, enabling us to focus on future innovations that benefit our organization and customers."

As the semiconductor industry faces mounting demand for advanced chips, this resolution not only closes a challenging chapter for IBM and GlobalFoundries but also sets the stage for potential partnerships leveraging IBM's research expertise and GlobalFoundries' manufacturing capabilities.