GlobalFoundries attacks TSMC to ban the import of Apple chips, Nvidia …

The US processor manufacturer GlobalFoundries filed a lawsuit in the United States and Germany against its Taiwanese competitor TSMC for the violation of 16 patents, as reported in detail by Tom's Hardware. A complaint that is accompanied by a request to stop the importation into the United States and Europe of chips produced for 20 customers. The problem is that these 20 customers are important: they are called Apple, Nvidia, Mediatek or Broadcom, Asus, etc.

Because without TSMC, no Axx chip in the iPhone for example, the company being, with competitor Samsung Electronics, champion of fine engraving. AMD split in two in 2009 – on one side chip design (AMD) on the other side (GlobalFoundries) – GlobalFoundries (GF) is like TSMC an independent "foundry" producing for third parties .

In this category of "pure players", they are rivals since TSMC is the world number 1 and GF the number 2, the first weighing however five times heavier. The attack is serious and relies on 16 strong patents (13 US and 3 European) relating to the design or manufacture of the chips that are in the portfolio of GF.

If it is up to both courts of justice to decide, both on requests to stop importation of chips partners and possible financial penalties, it is necessary to put the attack in context.

Switch market with a big check?

TSMC has become in a few years the champion of fine engraving and is the only company currently, with Samsung, to be able to burn with satisfactory rates of return in 7 nm. Ditto for the 5 nm EULV: only TSMC and Samsung seem to be able to take this turn in 2020/2021. Next door, GlobalFoundries is a bit pale: the company that used to make all the AMD chips now only produces its entry-level chips, with advanced processors now being produced by … TSMC! A form of technological disgrace that has highlighted the difficulty that GF encounters in improving its processes. And a reality that has led the company to a strategic shift this year: finished the race for finesse and volumes, GF has decided to focus on the production of "specific" developments such as RF chips, embedded memory, low-power chips, etc.

A change that probably explains a little frontal attack. Since TSMC customers like Nvidia or Apple are always looking for the best burning process, GF will probably not be dealing with them for a long time. And in case of victory, GlobalFoundries could receive a big check that would allow him to sit more comfortably his strategy. Note in passing that GF was careful not to put AMD on the dock, which is probably due to the links that still bind the two companies.

Asia-West Trade and Technology War

While it seems obvious that GF has been in contact with TSMC for a while to try to reach an agreement, this attack is based on the current geopolitical context. This context is obviously the Sino-American "crisis" which is a bit too, in extenso, a crisis between the West and Asia around the tools of advanced production. In a very explicit way, GlobalFoundries explains in its press release that This action (legal, ndr) is critical to put a stop to the fraudulent use of TSMC of our vital assets and to protect American and European production tools ". While it is clear that GF's rationale surfs out of this US / China trade war, there is more than one truth behind it: in twenty years, not only have semiconductor production volumes gone to Asia, but in addition this continent has now taken the technological advantage.

And if Taiwan is an ally of western countries, it is also a hunting ground for mainland China to recover technologies, as proved the case Micron / UMC. The GlobalFoundries / TSMC affair therefore seems to be on the way to a long feuilleton court amidst tensions between states and even between regions of the world. Who said that the semiconductor industry was boring?

Sources: Tom's Hardware, GlobalFoundries