GlobalFoundries files patent infringement lawsuits against Tower Semiconductor

SAN FRANCISCO, March 26 : GlobalFoundries said on Thursday it has sued Israel-based rival Tower Semiconductor, alleging that Tower Semiconductor infringed on 11 GlobalFoundries patents that relate to manufacturing chips that go into smartphones and other electronic devices.

GlobalFoundries said it has filed two complaints in the U.S. District Court for the Western District of Texas and one with the U.S. International Trade Commission. The Malta, New York-based semiconductor manufacturer said the ITC case will seek to block the import into the U.S. of chips made by Tower Semiconductor that were made with technologies covered by the patents in the case.

Tower Semiconductor said in a statement that it "firmly rejects the allegations made by GlobalFoundries and will vigorously defend its intellectual property and technology leadership."

"The company has a long-standing track record of substantial R&D investment in both the United States and globally, supported by two U.S. manufacturing facilities and leading-edge R&D centers," Tower said.

Tower Semiconductor shares closed down 7.45 per cent on Thursday, and GlobalFoundries shares fell 4.64 per cent, both larger drops than broader market indices such as the Nasdaq Composite Index, which closed down 2.38 per cent.

While large chip manufacturers such as Taiwan Semiconductor Manufacturing Co and Intel focus on making the fastest and smallest computing chips, GlobalFoundries and Tower Semiconductor are specialty chipmakers that focus on niches such as radio-frequency chips and silicon photonics. GlobalFoundries last year said it planned to spend $16 billion to expand its facilities in Vermont and New York, with a focus on research and development.