GlobalFoundries and TSMC Sign Broad Cross-Licensing Agreement, Dismiss Lawsuitsby Anton Shilov on October 28, 2019 6:30 PM EST
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GlobalFoundries and TSMC have announced this afternoon that they have signed a broad cross-licensing agreement, ending all of their ongoing legal disputes. Under the terms of the deal, the two companies will license each other's semiconductor-related patents granted so far, as well as any patents filed over the next 10 years.
Previously, GlobalFoundries has been accusing TSMC of patent infringement. At the time of the first lawsuit in August, TSMC said that the charges were baseless and that it would defend itself in court. In October, TSMC countersued its rival and, in turn, accused GlobalFoundries of infringing multiple patents. Now, less than a month after the countersuit, the two companies have agreed to sign a broad cross licensing agreement and dismiss all ongoing litigation.
According to the agreement, GlobalFoundries and TSMC cross-license to each other’s worldwide existing semiconductor patents, as well as any patents that are filed by the two companies in the next 10 years. Broadly speaking, GlobalFoundries and TSMC have thousands of semiconductor-related patents between them, some of which were originally granted to AMD and IBM.
Cross-licensing agreements are not uncommon in the high-tech world. Instead of fighting each other in expensive legal battles, companies with a broad portfolio of patents just sign cross-licensing agreements with peers, freeing them up to focus on innovating with their products rather than having to find ways to avoid infringing upon rivals' patents.
- GlobalFoundries Sues TSMC Over Patent Infringement; Apple, Qualcomm, Others Named Defendants
- TSMC Responds to Lawsuit by GlobalFoundries: Allegations Are Baseless
- TSMC Counter-sues GlobalFoundries: Accuses US Fab of Infringing Patents Across Numerous Process Nodes
- GlobalFoundries Mulls IPO Plans for 2022
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CiccioB - Monday, October 28, 2019 - linkVery interesting. This relaunches GF as a possible new foundry that can adopt the latest PP.
New actor on the market = better production capacity = lower prices and faster advancements (none can sleep on its advantage, Intel knows).
Yojimbo - Monday, October 28, 2019 - linkI doubt that. I don't think it was a lack of IP that led to GlobalFoundries' abandonment of pursuing the latest node shrinks. I think it had more to do with capital expenditure and the amount of revenue derived from it. My guess is that GlobalFoundries would have been happier with a cash settlement of the lawsuit rather than a cross-licensing agreement, but after analysis and negotiation with TSMC they decided it was too dangerous to try to pursue that through the courts.
NICOXIS - Tuesday, October 29, 2019 - linkMaybe they changed their minds seeing how much business TSMC is getting.
Frenetic Pony - Tuesday, October 29, 2019 - linkGuess we'll find out id due time, but as others pointed out capital requirements for smaller silicon are getting exponential. IP isn't the problem when fabs to use it cost billions.
levizx - Wednesday, October 30, 2019 - linkYou can't change your mind about how much money you have. TSMC and Samsung by now are at least 3 years ahead of GF even if they didn't sack all those people after abandoning 7nm.
Customer confidence is so VERY low that most of leading edge customers would rather wait for TSMC and Samsung to expand their fabs.
FreckledTrout - Tuesday, October 29, 2019 - linkMy take as well. I suspect TSMC was about to eat GloFlos lunch in court. They offered a cross licensing deal witch honestly GloFlo is not going to compete with TSMC so why the heck not as they can no longer take you to court. Its win for TSMC in my mind. Globalfoundries would have to invest a ton of money to compete again on any process better than 12nm.
Eliadbu - Tuesday, October 29, 2019 - linkGloFo competes with TSMC in the majority of it market share. If you look at TSMC quarterly reports while 7nm brings the most revenue, nodes from 16/12 28 and 40/45 still brings almost half of revenue combined. I believe TSMC is in position that it knows that the patents given to GloFo will not give them competitive edge over them in those nodes beyond what they already have. While going with legal procedures will just hurt both companies more than benefiting the since in case any company is ordered to stop distribution of infringing products it's huge blow costing billions - too risky for either of them.
Kevin G - Tuesday, October 29, 2019 - linkThis still ends up being a win-win for both companies and even customers. GF ends the litigation on a positive note and the ability to enhance its current foundries further. TSMC gets access to various SOI related patents which can still be helpful for future generations of nodes.
Customers win as there is *potential* for the development tools to become more cross-fab friendly. In other words, designs are engineered toward a more optimal common set of design rules after TSMC and GF start incorporating each other's ideas. This is a big if but it would save plenty of money in the development cycle for clients who want foundry independence.
Samus - Wednesday, October 30, 2019 - linkCross licensing at this level is always a win-win for companies. It's worked well for AMD and Intel since the 80's...at least until Intel started those Athlon-era shenanigans.
In the end, I think most of these companies 'know' when some of their IP is so broad that it really should be considered fair use. Like when there is literally only one way to do something and denying someone else the ability to do it would be straight up anti-competitive.
Enter, the patent trolls.
levizx - Wednesday, October 30, 2019 - linkThat's DUMB, if TSMC can win easily, why would they agree to cross-licence ? They are not stupid.