On Monday, semiconductor fabricator GlobalFoundries filed a patent infringement lawsuit against Taiwanese chipmaker TSMC in the United States and Germany. The Santa Clara, California-based firm alleges its rival has used 16 of its patents in the production of its components. Consequently, the manufacturer is seeking unspecified damages.

Besides, GlobalFoundries is asking American and German courts to stop the import of TSMC’s products. If the firm suit goes forward, it will have a significant impact on the American electronics industry. Currently, the Taiwanese company is a supplier for Avnet, Broadcom, Nvidia, and Qualcomm. It also provides components for device makers like Apple, Asus, Google, Motorola, and TCL.

GlobalFoundries’ Allegations

In a press release, GlobalFoundries notes that it spent $15 billion in the U.S. and $6 billion in Europe to develop its semiconductor development and fabrication capacity. By infringing on its patents, the firm argues TSMC has been illegally benefiting from its investments. The fabricator has specifically accused its Taiwanese competitor of manufacturing chips based on its 7nm, 10nm, 12nm, 16m, and 28nm patents.

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To exert additional pressure on TSMC, GlobalFoundries has asked courts in the Western District of Texas and the District of Delaware to block the import of the allegedly infringing chipsets into the U.S. The firm made similar filings in Düsseldorf and Mannheim, Germany.

GlobalFoundries senior vice president Gregg Bartlett told Venture Beat, “This action is critical to halt Taiwan Semiconductor’s unlawful use of our vital assets, and to safeguard the American and European manufacturing base.”

TSMC’s Response and Lawsuit Motivations

After GlobalFoundries’ filed its lawsuit, TSMC told Reuters its rival’s allegations are “baseless.” Furthermore, the Taiwanese fabricator expressed disappointment that the American firm launched a “meritless” court case rather than make better products.

As of this writing, none of TSMC’s clients have commented on GlobalFoundries’ filing.

While the courts will ultimately determine the validity of American chipmaker’s claims, the framing of its lawsuit is noteworthy. In 2018, the corporation announced it would not cease funding development of a new 7nm chipset. As a result, AMD said it would depend on TSMC to produce its bleeding-edge components. At that time, the Taiwanese company became a dominant player in the semiconductor fabrication industry.

The firm’s ability to move from 10nm to 7nm production won it the business of some heavyweight tech conglomerates. Moreover, the company’s plans to introduce a 5nm chip for 5G-enabled mobile devices next year will likely help it extend its market share.

As such, GlobalFoundries theoretically named TSMC’s biggest clients in its filing to force a quick high dollar settlement. If so, the American firm has enlisted an incredibly skilled legal team pursuing its interests.

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