Saratoga County

GlobalFoundries sues larger Taiwan competitor

Semiconductor manufacturer claims TSMC stole technology
GlobalFoundries is pictured in 2018.
GlobalFoundries is pictured in 2018.

Categories: News, Saratoga County

MALTA — GlobalFoundries, the international semiconductor manufacturer with its main plant in Saratoga County, sued its largest international competitor for patent infringement on Monday.

The Silicon Valley-based company announced it has filed multiple lawsuits in the United States and Germany alleging that industry giant Taiwan Semiconductor Manufacturing Co. (TSMC) infringed on 16 semiconductor manufacturing technology patents held by GlobalFoundries.

In the foundry world, in which semiconductors are manufactured for producers of a wide range of products, TSMC has long been the dominant worldwide player. GlobalFoundries ranks in third place, with Samsung, with whom GlobalFoundries shares some technology, in second place.

The lawsuits were filed with the U.S. International Trade Commission, federal district courts in Delaware and the Western District of Texas, and in the regional courts of Dusseldorf and Mannheim in Germany, where GlobalFoundries also has advanced manufacturing operations.

In filing the lawsuits, GlobalFoundries is seeking court orders that will prevent semiconductors produced by TSMC using the disputed technology from being imported into the United States and Germany. TSMC does most of its manufacturing in Taiwan, though it has some plants in mainland China.

In most cases, the actual importation of computer chips into the United States is done by electronics companies that use TSMC chips, including Apple, Qualcomm, and Google. As the importers of the technology, they are also named as defendants in the lawsuit.

GlobalFoundries seeks damages from TSMC it says are in the tens of billions of dollars.

“While semiconductor manufacturing has continued to shift to Asia, GF has bucked the trend by investing heavily in the American and European semiconductor industries, spending more than $15 billion in the last decade in the U.S. and more than $6 billion in Europe’s largest semiconductor manufacturing facility,” said Gregg Bartlett, GlobalFoundries’ senior vice president for engineering and technology. “These lawsuits are aimed at protecting these investments and the U.S. and European-based innovation that powers them.”

“For years, while we have been devoting billions of dollars to domestic research and development, TSMC has been unlawfully reaping the benefits of our investments,” Bartlett said.

TSMC spokeswoman Elizabeth Sun told the Bloomberg news organization that the company hasn’t been served with court papers and it isn’t familiar with the details of the suit. “TSMC has always respected intellectual property and we have developed all our technologies by ourselves,” she said.

Last August, GlobalFoundries announced it was cutting research into 7-nanometer computer chips, causing the elimination of 455 jobs at its Fab 8 plant in Malta and its research team at SUNY-Polytech in Albany. TSMC, meanwhile, has continued pursuing 7-nanometer research.

In the first quarter of 2019, TSMC had $7 billion in sales and 48 percent of the world market, while Samsung had $2.8 billion in sales and 19.1 percent of the market. GlobalFoundries had $1.2 billion in sales and 8.4 percent of the market, according to industry publications.

All the leading foundry companies have seen sales slide by between 15 and 20 percent from a year ago, with analysts pointing to reasons include weakening demand for consumer electronic goods and from the automobile market, slowing economic growth in China, and concerns about how a U.S.-China trade war could affect the global electronics market.

The Fab 8 plant in Malta, where GlobalFoundries has invested an estimated $12 billion since ground was broken in the Luther Forest Technology Campus a decade ago, employs about 3,000 people, in a facility GlobalFoundries says is making state-of-the-art chips.

Reach Gazette reporter Stephen Williams at 518-395-3086, [email protected] or @gazettesteve on Twitter.

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