The tech giant International Business Machines (IBM) and GlobalFoundries have agreed to settle all legal disputes between them. This includes lawsuits about broken contracts and claims of sharing confidential information.
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While the details of the settlement remain private, both sides expressed relief that the legal battles were over. Thomas Caulfield, CEO of GlobalFoundries, expressed his satisfaction, stating, “We are pleased to have reached a positive resolution with IBM, and we look forward to new opportunities to build upon our long-standing partnership to further strengthen the semiconductor industry.”
What Led to the Dispute?
The conflict originated from GlobalFoundries’ acquisition of IBM’s semiconductor manufacturing facilities in 2015. As part of the deal, IBM paid GlobalFoundries $1.5 billion to take over its unprofitable chip business. In return, GlobalFoundries committed to supplying IBM with high-performance chips over the next decade.
In 2021, IBM sued GlobalFoundries, saying the company failed to deliver the promised chips. IBM claimed that GlobalFoundries stopped working on important chip technologies that IBM needed.
In response, GlobalFoundries filed a countersuit in 2023. It accused IBM of sharing trade secrets with competitors, such as Intel (INTC), and using confidential information unfairly.
Impact on the Industry
This agreement is good news for the semiconductor industry, which is witnessing high demand for advanced chips. Notably, GlobalFoundries recently secured $1.5 billion from the U.S. Commerce Department to expand its manufacturing facilities in the U.S., boosting domestic chip production.
With their disputes resolved, IBM and GlobalFoundries can now work together to enhance semiconductor technologies using their shared expertise.
Is IBM a Buy or a Sell?
On Wall Street, IBM is considered a Moderate Buy. The average price target for IBM stock is $231.10, suggesting a 5.07% upside potential.
