GlobalFoundries Inc sued larger rival Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) for using its patented chip technology and requested that a US trade agency impose import bans that could roil the market for crucial components of a huge swath of electronics, including Apple Inc’s iPhone.
The US-headquartered chipmaker, which like TSMC manufactures semiconductors for other companies, on Monday filed patent infringement complaints at the US International Trade Commission in Washington, as well as civil lawsuits at federal courts in the US and Germany.
The complaints cite TSMC and customers including Apple, Broadcom Inc, Qualcomm Inc, Xilinx Inc, Nvidia Corp and their devicemaker customers including Cisco Systems Inc, Alphabet Inc’s Google and Lenovo Group Ltd (聯想).
The broad-ranging legal assault threatens to disrupt the supply of everything from smartphones to personal computers to vital infrastructure like switches and routers that are the backbone of the Internet.
It highlights the importance of TSMC as a maker of the components that keep modern electronics running.
It also came at a time when the worldwide supply chain is being disrupted by a trade dispute between China and the US.
“TSMC is in the process of reviewing the complaints filed by GlobalFoundries on Aug. 26, but is confident that GlobalFoundries’ allegations are baseless,” TSMC said in a statement yesterday.
Investing billions of US dollars every year on independently developing leading-edge semiconductor manufacturing technologies, 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 three consecutive years since 2016, it said.
“We are disappointed to see a foundry peer resorting to meritless lawsuits instead of competing in the marketplace with technology,” TSMC said. “We will fight vigorously, using any and all options, to protect our proprietary technologies.”
TSMC shares yesterday closed up 0.6 percent at NT$250 in Taipei trading.
GlobalFoundries is positioning the case as US and European inventions being illegally used by an Asian company that has an increasing stranglehold on crucial parts of the technology industry.
“Someone had to do something, the world needs a competitive semiconductor industry,” said Sam Azar, senior vice president of corporate development at GlobalFoundries. “We’re using courts in the US and Europe that care about protecting manufacturing.”
GlobalFoundries has factories in upstate New York and Dresden, Germany. Its headquarters is in Silicon Valley. The closely held company is owned by Mubadala, the investment arm of the government of Abu Dhabi.
GlobalFoundries, like other contract chipmakers, has struggled to keep pace with TSMC whose factories are now rated the best in the industry.
The US-based company is seeking “substantial” damages from its Taiwanese rival, which it alleges is using GlobalFoundries’ technology to help it win tens of billions of US dollars of sales, it said in a statement.
German courts work quickly and are known for ordering a halt of imports of products even before litigation is completed to protect patent owners.
The commission in Washington, which protects US markets from unfair trade practices, also has a reputation for speed, with investigations completed in 15 to 18 months. It has the ability to block products entering the world’s largest economy.
It has occasionally opted not to do that if it decides a ban would be counter to the public’s best interest.
The US civil suits, filed in federal courts in Delaware and Texas, would take longer, but could result in large damage awards.
Throughout the complaint, GlobalFoundries cited products including iPhones, AirPods, Apple TV and iPad models.
It also mentioned Cisco’s switch boxes as using infringing chips and Lenovo computers that are based on Nvidia graphics chips.
GlobalFoundries argued that a ban would not hurt consumers because Samsung Electronics Co is a licensee and other companies such as Sony Corp, LG Electronics Inc and Vizio Inc are not included in the litigation.
That means there would be an adequate supply of smartphones and other consumer electronics, it said in the court filings.
Samsung and GlobalFoundries had a chipmaking technology partnership.
The patents GlobalFoundries is asserting cover the fundamentals of how semiconductors are manufactured. Some are US patents and others are European covering esoteric, but important areas like “structures of and methods and tools for forming in-situ metallic/dialectric caps for interconnects.”
They involve the most advanced technique, called 7-nanometer, that TSMC is using.
GlobalFoundries’ Azar said his company wants TSMC to stop using the patented technology, which would be difficult to work around, or ask for a license and pay for the right to continue using the inventions.
Companies like Apple, Cisco and Nvidia are named in the complaints, because TSMC does not import the chips or sell them to consumers; the only way to stop the chips from entering the US and Germany is to block the products that use them.
Additional reporting by Lisa Wang
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