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GlobalFoundries asks court to resolve dispute with IBM

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Semiconductor contract manufacturer GlobalFoundries has sued IBM for confirmation that it was not in breach of its contract with the company. IBM claims it is owed $ 2.5 billion in damage caused by breach of contract.

In a lawsuit filed by GlobalFoundries in a New York state court, it is said that the American company IBM has accused GlobalFoundries, owned by the Abu Dhabi state fund Mubadala, of refusing to continue producing chips for IBM.

GlobalFoundries acquired IBM’s semiconductor businesses in 2014, when IBM decided to exit its own chip business. But in 2018, GlobalFoundries abandoned the further development and use of advanced technologies for the production of microcircuits due to the high development cost. Then IBM turned to Samsung Electronics with orders for the production of its microcircuits.

According to GlobalFoundries, IBM “was silent for almost two and a half years,” but then sent a letter to GlobalFoundries in April this year claiming that the chipmaker had violated its contract.

“With the exception of the threat to sue if GlobalFoundries does not capitulate to its claims, IBM has not provided any material explanation for its claims,” ​​says GlobalFoundries.

Meanwhile, IBM said in a statement that it believes GlobalFoundries has defaulted on its contractual obligations.

“IBM poured $ 1.5 billion in GlobalFoundries to secure its next generation chip supply, and GlobalFoundries ditched IBM entirely as soon as the final payment was received and sold the assets from the deal to enrich itself,” says IBM.

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