GlobalFoundries Alleges Anti-Trust Practices By Taiwan Semiconductor Manufacturing

The world’s second-biggest contract chipmaker, GlobalFoundries, has sent a request to Chinese regulators asking them to undertake a probe of Taiwan Semiconductor Manufacturing, over possible violation of antitrust laws. According to reports the National Development and Reform Commission of China was told by GlobalFoundries that the Taiwanese firm adopted unfair practices which were meant to discourage clients from doing business with rival companies. This had the effect of negatively impacting the business of GlobalFoundries and the wider industry.

The chief financial officer and senior vice president of Taiwan Semiconductor Manufacturing, Lora Ho, however denied this. Ho however said the contract chipmaker would cooperate with the authorities in a statement issued to Nikkei Asian Review.

Common practise

“It is common practice for a complainant alleging antitrust violation to petition the various antitrust regulators in major markets. We will cooperate fully should there be inquiries or requests from regulators regarding any investigation,” said Ho.

According to Ho the industry was highly competitive with no room for antitrust practices. On its part GlobalFoundries said it would let the law take its course to prevent illegal behavior that was harming competition.

At the moment Taiwan Semiconductor Manufacturing is the biggest contract chipmaker in the globe and has approximately 55.9% of the market share. Per the Taipei, Taiwan-based Trendforce’s Topology Research Institute, Taiwan Semiconductor Manufacturing produces chips for various multinational tech firms that include Nvidia, Qualcomm and Apple.

Global dominance

While the U.S.-based GlobalFoundries is the world’s second biggest contract chipmaker its global market share is in the single digits – 9.4%. Other notable players include Taiwan’s United Microelectronics Corp which has a market share of 8.5% and Semiconductor Manufacturing International of China which has a market share of 5.4%.

Currently GlobalFoundries is experiencing struggles amidst heightened competition. This is in the wake of giant chipmakers such as Intel and Samsung Electronics who previously only made chips for internal use beginning to dabble in contract manufacturing as they look for new growth avenues. Samsung is at the moment the largest provider of memory chips in the world and has indicated intentions to dislodge GlobalFoundries from the No. 2 spot in contract chipmaker. The South Korean tech giant has also set its sights on challenging the dominance of Taiwan Semiconductor Manufacturing.

This is not GlobalFoundries’ first time to file complaints regarding competitors to government agencies. Last year the contract chipmaker complained to the executive body of the European Union that Taiwan Semiconductor Manufacturing had unfairly used rebates and sometimes penalties to block the defection of customers.