GlobalFoundries sues IBM, says trade secrets were unlawfully given to Japan’s Rapidus

On Wednesday, chipmaker GlobalFoundries Inc. (GFS.O) sued IBM.N for illegally disclosing private intellectual property and trade secrets.

In its case, New York-based GlobalFoundries claimed that IBM had shared IP and trade secrets with Rapidus, a new state-backed Japanese consortium that IBM is working with to design and create cutting-edge two-nanometre processors.

In 2021, IBM stated it will collaborate with Intel on next-generation chip technology, and it claimed IBM had unlawfully revealed and exploited its IP with Intel Corp INT(C.O).

“IBM is unjustly receiving potentially hundreds of millions of dollars in licensing income and other benefits,” GlobalFoundries argued.

In 2015, GlobalFoundries bought the exclusive right to license and disclose technologies produced by IBM and GlobalFoundries in Albany, New York over decades.

GlobalFoundries seeks compensatory, punitive, and injunctive damages from IBM. It also sought the court to stop IBM from recruiting GlobalFoundries engineers, which have increased since the Rapidus alliance was announced in December 2022.

Rapidus, which includes Sony Group Corp (6758.T), NEC Corp (6701.T), and other key tech companies, is a national strategic asset and a symbol of U.S.-Japan cooperation in Japan.

Japan has fallen behind in chip manufacture, especially sophisticated semiconductors, and is now scrambling to catch up to ensure its carmakers and IT businesses don’t run out.

GlobalFoundries sued IBM again after buying IBM’s semiconductor operations in 2015.

GlobalFoundries sought a judge in 2021 to find that it did not violate a contract with IBM that demands $2.5 billion in penalties. A GlobalFoundries spokeswoman said that litigation continues.