At the end of August, GlobalFoundries sued TSMC and 20 of its customers for infringing 16 of its patents. The almost-inevitable countersuits landed  Monday night. TSMC has charged GF with ongoing infringement of 25 of its patents.

The remedies TSMC is seeking include injunctions to force GF from continuing to manufacture any devices with infringing technology, injunctions against GF selling any such product that might be ready to ship, and “substantial monetary damages.”


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GlobalFoundries’ response to TSMC's countersuit was circulated via email two hours after TSMC circulated the news. “TSMC has long used its dominant market position to exert pressure on its smaller competitors, and the retaliatory litigation filed today is in keeping with that history. We have confidence in our position and the legal process, and we are not intimidated by these actions.” The response was signed by Sam Azar, senior vice president of corporate development, legal and government affairs for GF.

GF filed its lawsuits in the United States and in Germany. TSMC filed its countersuits in the US, in Germany, and in Singapore.

TSMC says GF is infringing patents that cover technologies used at major nodes from 40nm down to 12nm – “…at least.”

That two-word qualifier seems to be a reference to decisions GF recently made about its manufacturing plans. GF was going to bypass the 10nm node and hop straight to 7nm, but at the end of August it announced it was suspending development on 7nm technology. Should the company revive its plans to shrink down from 12nm, it is likely TSMC is prepared to add those products to its countersuit.

TSMC said the patents it is accusing GF of infringing cover FinFET designs, shallow trench isolation techniques, double patterning methods, advanced seal rings and gate structures, and innovative contact etch stop layer designs. TSMC pointedly noted that these were only a few of its “more than 37,000 granted patents worldwide.”

You want to sue us over patents? TSMC seems to be saying. We have a really, really fat portfolio of patents to countersue over.

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TSMC also larded its announcement with what looks to be boilerplate, which it expanded upon in an attachment of “Additional Facts.” The additional information went on and on about TSMC’s place in the global economy, about the extent to which the US semiconductor industry (largely fabless or “fab-lite”) relies on TSMC, about how many billions of dollars’ worth of equipment TSMC buys from US vendors, abut its leading-edge R&D work with US-based customers, and about how it has over 1,000 employees in the US. But it's not necessarily just filler text.

You wanna fight? TSMC seems to be saying, okay, we can fight. But the collateral damage is going to be nasty. You all good with that?  

TSMC also added some text talking about trust: “…Developing this level of trust with many of the largest and most innovative technology companies requires a commitment to integrity instilled in the Company by its Founder, Dr. Morris Chang.” It’s a passage that should make most people’s eyes glaze over but is a clear appeal to the industry that TSMC wants to be reasonable.

The inference is clear: Nobody needs this right now, and if things get out of hand, remember we didn’t start this, GlobalFoundries did.  

As if to underscore the point, that plea was immediately followed by a rehash of the suit GF originally filed against TSMC.

Jim McGregor, principal analyst at Tirias Research, told EE Times, "This is a case where no one wins except the lawyers. As expected, TSMC is retaliating against the lawsuits filed by GlobalFoundries." He added, "While GlobalFoundries is seeking damages, the most likely outcome is a broad cross-licensing agreement that prevents future patent infringement lawsuits between the two companies. Otherwise, the suit will be tied up in the courts for years and any monetary settlement is offset by legal fees."

ADDENDUM

In August, GlobalFoundries not only filed lawsuits against TSMC, but also filed a formal complaint with the US International Trade Commission under section 337 of the US Tariff Act of 1930. The ITC explains that such complaints commonly pertain to importing products that the complainant says infringe patents, and that is the case here. In its ITC filing, GF named not only TSMC, but also:

  • Broadcom Corporation of San Jose, CA;
  • Nvidia Corporation of Santa Clara, CA;
  • Apple Inc. of Cupertino, CA;
  • Arista Networks, Inc., of Santa Clara, CA;
  • AsusTeK Computer Inc. of Taipei, Taiwan;
  • Cisco Systems, Inc., of San Jose, CA; and
  • Lenovo Group Ltd. of Beijing, China.

We asked a GlobalFoundries spokesman to elaborate on the charge that TSMC "has long used its dominant market position to exert pressure on its smaller competitors." The spokesman pointed to a complaint the company lodged with the European Union in 2017. GF, at the time, did not publicly specify the practices it objects to, either. Reuters quoted an anonymous source that said GF believes TSMC "unfairly uses loyalty rebates, exclusivity clauses and bundled rebates as well as penalties to discourage customers from switching to rivals."

— Judith Cheng contributed to this article.