UPDATE: TSMC has released a statement which reads, "TSMC is in the process of reviewing the complaints filed by GlobalFoundries on August 26, but is confident that GlobalFoundries’ allegations are baseless. As a leading innovator, TSMC invests billions of dollars each year to independently develop its world-class, leading-edge semiconductor manufacturing technologies. As a result, TSMC has established one of the largest semiconductor portfolios with more than 37,000 patents worldwide and a top 10 ranking for US patent grants for 3 consecutive years since 2016. We are disappointed to see a foundry peer resort to meritless lawsuits instead of competing in the marketplace with technology. TSMC is proud of its technology leadership, manufacturing excellence, and unwavering commitment to customers. We will fight vigorously, using any and all options, to protect our proprietary technologies."
The ITC could block imports of the Apple iPhone, iPad and certain Android devices from entering the U.S.
The patents cited by GlobalFoundries in its suit cover certain technologies used in the production of chips. The suit alleges that TSMC’s 7 nm, 10 nm, 12 nm, 16 nm, and 28 nm process nodes use unlicensed intellectual property belonging to the plaintiff. These chips provide TSMC with more than 50% of its annual revenue which means that the damages demanded by GlobalFoundries could be in the billions of dollars. 13 of the patents allegedly infringed are from the U.S. while the remaining three were registered in Germany. GlobalFoundreies is based in California but is owned by Mubadala Investment Co., an investment arm of the Abu Dhabi government. It claims to have spent $15 billion in the states and $6 billion in Europe over the last 10 years.
The ITC can block the importation of products into the U.S. that infringe on U.S. patents. An import ban could do plenty of damage to companies like Apple and manufacturers of Android devices. Patrick Moorhead, the president of analysis and advisory firm Moor Insights & Strategy, says that the company went after manufacturers like Apple because they need faster chips than GlobalFoundries can produce. Moorhead said, "You can bet GlobalFoundries was trying to collect royalties behind the scenes, failed, and will now let the courts decide. The end [manufacturers] aren’t the main target, but targeted to put pressure on TSMC."
Over the last few years, GlobalFoundries has focused on cheaper chips that are less advanced but are still profitable. During this year's first quarter, the company had an 8.4% share of the market for contract chip production compared to 48.1% for TSMC and 19.1% for Samsung.