Globalfoundries sues Apple, Nvidia, Qualcomm, and TSMC over chip patents

Globalfoundries, which until last year was one of the world’s most aggressive semiconductor manufacturers, today filed lawsuits against Taiwanese chipmaker TSMC and its key customers in a move that could have ramifications for the entire consumer electronics industry. The California-based company alleges that TSMC is infringing 16 patents relating to chip manufacturing and, in addition to seeking damages, has asked courts to block TSMC’s customers from importing infringing products into the U.S. and Germany.

According to Globalfoundries, “TSMC has been unlawfully reaping the benefits of our investments” in U.S. and European semiconductor manufacturing by utilizing Globalfoundries technologies in Asian factories. “This action is critical to halt Taiwan Semiconductor’s unlawful use of our vital assets,” Globalfoundries engineering SVP Gregg Bartlett explained, “and to safeguard the American and European manufacturing base.”

While Globalfoundries is focusing its efforts on TSMC, it has named 20 defendants in its U.S. and German lawsuits, including fabless chip designers Apple, Broadcom, Mediatek, nVidia, and Qualcomm; consumer product makers ASUS, Cisco, Google, Motorola, OnePlus, and TCL; and several distributors of components. It’s alleging that TSMC’s 7, 10, 12, 16, and 28 nanometer processes are infringing patents, with filings at the U.S. International Trade Commission, U.S. District Courts in Delaware and Texas, and regional German courts in Dusseldorf and Mannheim.

Globalfoundries dropped out of the race to manufacture tiny 7-nanometer chips last year, effectively ceding the market for ever-smaller processors to Asian rivals TSMC and Samsung. A key customer, AMD, simultaneously said that it would switch its 7nm chip supply orders to TSMC, mirroring previously announced purchasing plans from most of the consumer electronics industry’s major players.

Even Globalfoundries acknowledges that TSMC has become the industry’s “dominant semiconductor manufacturer,” as the Taiwanese company has boldly continued to commercialize new manufacturing technologies, including ones requiring bleeding-edge extreme ultraviolet lithography hardware. The company effortlessly advanced from 10nm to 7nm processes, and is expected to begin making 5nm chips next year.

Each new manufacturing process technology shrinks the size of chips, yielding significant performance and energy consumption benefits, while requiring massive expenditures in new equipment and R&D. Globalfoundries now refers to itself as the “world’s leading specialty foundry based in the United States,” and might — through a successful lawsuit or settlement — recoup some of the revenues lost to TSMC as it became the only major manufacturer capable of fabricating 7nm processors.

The actual risk to TSMC-dependent companies such as Apple, nVidia, and Qualcomm is unclear. Globalfoundries selected courts that have been receptive to possible import bans, having only recently threatened Apple with potential iPhone import blocks in the U.S. and Germany based on now-resolved patent lawsuits with Qualcomm. In this case, Globalfoundries has named many of TSMC’s downstream customers so it can threaten imports of products with allegedly infringing chips, almost certainly in hopes of forcing a quick and/or major financial settlement with the Taiwanese manufacturer.