US economy

GlobalFoundries sues Apple supplier TSMC, seeks iPhone import ban

GlobalFoundries said it has filed 25 patent infringement lawsuits against Apple supplier TSMC and is seeking an injunction to have certain iPhones, AirPods and other products banned from import into the US and Germany.

The semiconductor manufacturer, based in Santa Clara, California, said it is seeking “significant damages” from Taiwan-based TSMC based on allegations of “unlawful use . . . of proprietary technology in [TSMC’s] tens of billions of dollars of sales.”

The group filed five lawsuits alleging that semiconductor manufacturing technologies used by TSMC infringed on 16 of its patents. One of the lawsuits cites details in “confidential exhibits” allegedly showing that the TSMC processors in question were used in the design of at least six Apple products, including the Apple Watch, the iPad Mini, the TV 4K and the XS iPhone.

Included in the complaints are patents related to 7 nanometre chips, the most advanced processors to date. Last year, GlobalFoundries quit developing the leading edge technology, a boon to TSMC.

GlobalFoundries named Apple and other TSMC customers as defendants because it is seeking an order to “prevent semiconductors produced with the infringing technology” from being imported into the US and Germany.

The lawsuits required GlobalFoundries to name these customers, potentially shedding light on the electronics supply chain at a time when the US trade war with China is already causing some production to be rearranged.

Five of those named in the lawsuits, including Apple, are also GlobalFoundaries customers, highlighting the complexity of the semiconductor supply chain. “TSMC can make this stop,” said Sam Azar, senior vice-president of corporate development, legal and government affairs at Global Foundries. “They’re the ones that put their customers and the supply chain at risk.”

“With Global Foundries focusing more on [Internet of Things] and [radio frequency], it appears to be going after companies that likely won’t be future customers but are believed to infringe on its patents for leading edge process,” said Patrick Moorhead, analyst at Moor Insights.

“You can bet GF was trying to collect royalties behind the scenes, failed, and will now let the courts decide. The end OEMs aren’t the main target, but targeted to put pressure on TSMC,” he added.

Other named defendants are chipmakers Broadcom, MediaTek, Nvidia, Qualcomm and Xilinx. GlobalFoundries said Apple was violating Section 337 of the Tariff Act of 1930 by importing products that “infringe” on the patents under question.

A fact sheet also cites Google, Asus, Lenovo and Motorola, among other consumer product makers, as defendants.

Gregg Bartlett, senior vice-president at GlobalFoundries, said the group had for years been “devoting billions of dollars to domestic research and development, [while] TSMC has been unlawfully reaping the benefits of our investments.”

He added: “This action is critical to halt Taiwan Semiconductor’s unlawful use of our vital assets and to safeguard the American and European manufacturing base.”

GlobalFoundries’ Mr Azar said the majority of the world’s chips are produced in Taiwan. “Especially during uncertain times, how did we let that happen?” he asked.

Mr Azar said GlobalFoundaries decided to bring the case now because it had become “more profitable and sustainable.” He said the company hoped TSMC would agree to license its technology, as well as “compensate us for the billions in sales” that it said the Taiwanese company had made using its intellectual property.

TSMC could not immediately be reached for comment. Apple declined to comment.

The lawsuits were filed in the US International Trade Commission, federal district courts in Delaware and Texas, and the regional courts of Düsseldorf and Mannheim in Germany.


Leave a Reply

This website uses cookies. By continuing to use this site, you accept our use of cookies.