GlobalFoundries seeks ruling in IBM contract dispute
Reuters
Published Jun 07, 2021 10:04PM ET
By Stephen Nellis
(Reuters) - Semiconductor manufacturer GlobalFoundries on Monday sued International Business Machines (NYSE:IBM) Corp, asking a judge to rule that it did not violate a contract with the U.S. company which claims it is owed $2.5 billion in damages.
IBM has accused GlobalFoundries, which is owned by Abu Dhabi's state-owned fund Mubadala, of failing to continue making chips for IBM, according to a filing by GlobalFoundries with the state court in New York.
GlobalFoundries purchased IBM's semiconductor plants in 2014 when IBM decided to exit the business of manufacturing its own chips. But it quit pursuing advanced chipmaking technology in 2018 due to the high costs of development and IBM instead turned to Samsung Electronics (OTC:SSNLF) Co Ltd to make its chips.
IBM "went silent for nearly two-and-a-half years" after the changes in 2018, but then in April of this year sent GlobalFoundries a letter alleging that the chipmaker had violated its contract," the filing said.
"Other than threatening to sue unless it capitulated to its demands, IBM has yet to provide any substantive explanation as to its claims," GlobalFoundries wrote in the suit.
IBM said in a statement it believes GlobalFoundries did not fulfill its obligations under the contract.
"IBM contributed $1.5B to Global Foundries to supply the next generation of chips, and Global Foundries utterly abandoned IBM as soon as the final payment was received and sold off assets from the deal for its own enrichment," IBM said.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.