IBM and GlobalFoundries (GF) have reached a settlement in their long-running legal dispute which saw both companies claim breach of contract and misuse of trade secrets and intellectual property.

In a joint statement, the two companies said the undisclosed settlement resolves “all litigation matters” and would allow them to “explore new opportunities for collaboration in areas of mutual interest.”

The legal dispute stems from GlobalFoundries' takeover of IBM’s loss-making chip business in 2015. The deal saw IBM pay GF $1.5bn to take the semiconductor unit off its hands, and in return, GF agreed to become IBM's sole chip supplier for the next decade.

However, in 2021, IBM sued GF for breach of contract, alleging the chipmaker had reneged on the deal to provide it with 7nm chips by abandoning the development of the technology.

GlobalFoundries then counter-sued IBM in 2023, alleging that the company had shared trade secrets and intellectual property with Intel and Japan’s state-backed chipmaker Rapidus without permission.

In a statement, Dr. Thomas Caulfield, president and CEO of GF, said: "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.”

Chairman and CEO of IBM, Arvind Krishna, echoed his sentiment, and added: “Resolving these disputes is a significant step forward for our companies and will allow us to both focus on future innovations that will benefit our organizations and customers.”

The dispute with IBM is not the only legal issue GlobalFoundries has been embroiled in recently. In November 2024, the company was fined $500,000 by the Department of Commerce for shipping chip components to a Chinese company on the US government’s entity list.

While the Bureau of Industry and Security (BIS) noted that the company voluntarily disclosed the breach to the department and cooperated with the investigation, it warned US companies “to be hypervigilant when sending semiconductor materials to Chinese parties.”

Despite the breach, that same month GF was awarded $1.5bn by the US government under the CHIPS and Science Act to help expand the company’s existing fab in Malta, New York.