RESEARCH TRIANGLE PARK – IBM and semiconductor manufacturer GlobalFoundaries are locked in a dispute over $2.5 billion that IBM says it is owed from a deal struck in 2014.
GlobalFoundaries is preparing for an IPO of stock that could generate as much as $30 billion.
“IBM contributed $1.5B to Global Foundries to supply the next generation of chips, and Global Foundries utterly abandoned IBM as soon as the final payment was received and sold off assets from the deal for its own enrichment,” IBM said in a statement provided to Reuters news service.
GlobalFoundaris sued IBM over the claim and on Monday asked the judge in the case to rule that it did not violate the agreement with Big Blue.
“Other than threatening to sue unless it capitulated to its demands, IBM has yet to provide any substantive explanation as to its claims,” GlobalFoundries said.
While IBM sold off its chip manufacturing facilities it continues to invest in chip research and development, recently announcing the world’s first 2 nanometer chip.
In 2014 GlobalFoundaries acquired IBM’s chip manufacturing business. As part of the deal GlobalFoundaries continued to pursue development of new chip making technology from IBM but, citing growing costs, dropped the move in 2018.
Reuters noted that IBM turned to Samsung to make chips.
The company “went silent for nearly two-and-a-half years” after the changes in 2018, but then in April of this year sent GlobalFoundries a letter alleging that the chipmaker had violated its contract,” Reuters reported, citing the filing.
“Other than threatening to sue unless it capitulated to its demands, IBM has yet to provide any substantive explanation as to its claims,” GlobalFoundries wrote in the suit.
“This action arises out of what seems to be a misguided and ill-conceived effort by IBM’s law department to try to extract an outlandish payment,” GlobalFoundries said its complaint, according to Bloomberg.
The former IBM production facilities are located in New York state and Vermont.
IBM employs thousands of people across North Carolina, owns Raleigh-based Red Hat, and operates one of its lartgest global campuses in RTP.