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Intel, AMD kiss and make up

Intel and AMD have been involved in long-standing dispute over intellectual property and antitrust issues. Intel was fined $1.45B by the EU for its anticompetitive practices and last week, New York Attorney General Andrew Cuomo filed an antitrust lawsuit against Intel.

Cuomo had rather harsh words for Intel, stating, “Rather than compete fairly, Intel used bribery and coercion to maintain a stranglehold on the market. Intel’s actions not only unfairly restricted potential competitors, but also hurt average consumers who were robbed of better products and lower prices.”

However, Intel and AMD now appear to be making amends. The pair issued a joint statement today which reads, “While the relationship between the two companies has been difficult in the past, this agreement ends the legal disputes and enables the companies to focus all of our efforts on product innovation and development.”

As a part of the settlement, Intel will pay AMD $1.25 billion, AMD will drop all of its pending lawsuits against Intel, and the pair will enter into a new 5-year cross license agreement. In addition, Intel will "abide by a set of business practice provisions" in the future.

AMD CEO Dirk Meyer today championed the agreement, stating, "Today, I am pleased to announce the last major component of that transformation – in the form of a transparent and public agreement with Intel to create a level playing field in the x86 processor industry – taking us one big step closer to achieving our bold vision."

Meyer continued, adding, "Today marks the beginning of a new era... one that confirms that the game has changed for AMD. It is an important milestone for us, for our customers, our partners, and most important – for consumers and businesses worldwide. In addition, it represents the culmination many years of litigation and regulatory engagement."

Following the announcement, AMD shares are up 25 percent to $6.61 while Intel is up almost a percentage point to $20.05 as of 10:00 AM EST.

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RE: What will be AMD's excuse in the future be then?
By Mint on 11/12/2009 12:12:32 PM , Rating: 2
There is no excuse. In the past, we were all baffled why AMD couldn't break 20% market share when Intel's crappy P4 was getting trounced in all metrics. That's mostly what these lawsuits were about - the past.

Now Intel actually has the best processors, so they deserve their success. All AMD can do is hope their engineers can figure out the same things Intel's have in boosting IPC, and that Global Foundaries doesn't keep falling further behind Intel's fabs.

Either that, or hope that Intel decides to revel in huge margins rather than continue to force AMD into the red. This is quite possible, as CPUs are getting too cheap for Intel's liking anyway. NVidia did the same thing in the G7x days.

By weskurtz0081 on 11/12/2009 12:14:42 PM , Rating: 2
It's not just about the past, it's about how the past has hurt AMD's future.

By Master Kenobi on 11/12/2009 12:26:35 PM , Rating: 2
You do realize back when the Athlon was king, AMD was selling their processors as fast as they could make them. In the P4 era, AMD was simply not large enough to produce processors to meet demand. Intel kept their large market share because they could deliver on demand. I remember Dell forcing AMD to guarantee processor inventories prior to signing a deal with them. As soon as AMD started to supply Dell, channel chips dried up rapidly as AMD was unable to keep up demand.

I expect AMD to not pass 20% until they can get the new fab in New York online.

By William Gaatjes on 11/12/2009 12:39:44 PM , Rating: 1
You forget the little cross license agreement details that prevented AMD from using external chip foundries like for exampl TSMC. AMD was to only make x86 cpu's at their own foundries. THat was the reason AMD could not make more. AMD did not had enough production capacity and AMD was not allowed to go to other foundries. If my memory services me right, that is.

By weskurtz0081 on 11/12/2009 1:38:24 PM , Rating: 1
Basically, Intel was trying to make it prohibitively expensive for other companies to rival them in the X86 market.

RE: What will be AMD's excuse in the future be then?
By molgenit on 11/13/2009 8:14:45 AM , Rating: 3
Your right, however that is NOT illegal nor has that changed. That would also have been a sticking point in any trial, basically AMD had to present the case that Intel forced them to sell at a lower price, and thus they lost profits, not that Intel stopped them from selling more since they simply could not. That (and of course the immediate need for cash)is probably the reason for the settlement.

By weskurtz0081 on 11/13/2009 11:36:00 AM , Rating: 1
The cross license agreement actually HAS changed. Now, AMD will be able to use external foundries to make chips.

By William Gaatjes on 11/13/2009 12:26:54 PM , Rating: 1

Out of this settlement come four major things for AMD:

1. $1.25 billion in cold, hard cash.
2. Intel will stop doing things that they and AMD agree they shouldn’t be doing.
3. The right to not have to produce x86 CPUs in-house.
AMD can go fabless.

4. The right to have their x86 processors fabricated anywhere of AMD’s choosing .

By William Gaatjes on 11/14/2009 3:02:09 AM , Rating: 2
We got rated down. Somebody does not like the truth even if it is partial. :)

But i remember that it was not an all or nothing case. It was percentage wise. AMD was able to outsource but on a severe limited amount. As far as i can remember it was 20 percent and that was being done at Chartered semiconductor based in Singapore.

By bruce24 on 11/13/2009 1:54:35 PM , Rating: 2
re: we were all baffled why AMD couldn't break 20% market share

But they did from Q4 of 2005 through Q1 of 2008, except for Q1 2007 where it dropped un der 20%. The high was 25.3% in Q4 of 2006.

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