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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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By Sahrin on 11/13/2009 11:44:51 AM , Rating: 2
You're confusing my supposition cases with statements of fact. While I do believe that it's fact that Intel broke anti-trust law and caused harm to AMD and the marketplace in doing so and I also think you're blind if you can't see that (based on what INTEL executives have said), I am not guaranteeing an outcome; I am extrapolating one.

I'm curious. Since we know at the time AMD's production lines were already maxed out, and they could barely deliver product for what demand they had. How were they going to make billions more in OEM sales if they couldn't meet demand ??

First of all, the range of time we're talking about extends all the way back to the K7 (not just K8). Up until Northwood, AMD had the performance lead over Intel in most applications, and got almost *zero* design wins. If AMD had gotten those design wins, they'd've had the revenue to invest in greater production expansion, etc.

That aside, AMD had already put in place agreements to expand production up to 50% of desktop shipments (see: Chartered Semi). This was never fully implemented, because the orders never materialized, because Intel bribed AMD's customers not to buy AMD. The EU has already determined this happened in Europe. There is no conviction in the US (just a bunch of lawsuits and criminal charges filed), but given that Europe is a much stricter regulatory climate than the US (*especially* in the period we are talking about) what is it about Intel that makes you think they wouldn't use the same tactics here? I agree that "guilty in Europe" does't equate with "guilty in America" - but combine "guilty in Europe" with "openly stated they were concerned their behaviours violated anti-trust laws in e-mails" and "execs of OEM's openly stated they were be retaliated against financially if they bought from AMD" and you get: guilty in America.

AMD's case would've been: if the market would've been free, we would have HAD the production capacity. You're presupposing a situation that didn't exist: AMD could've supplied to Dell, et al. They couldn't've - even if they *had* the capacity, because Intel would've bribed the OEM's away.

Completely unfounded and unproven statement. And since they didn't go to trial, you sure as hell can't state this with utter certainty.

That's true, I did not present any foundation or proof in my post. But since it's a supposition predicated on the information presented in the article the comment appears directly under, I thought you would pick up on it there. My bad. I'll be sure to re-post the text of the article in my comments for your benefit heretofore.

Right, nothing against INtel, but AGAIN you slander their name with unproven accusations. Also you fail in understanding economics, Intel didn't create prices, the market did. What's rule number 1 ? A good price is one that the consumer is willing to pay.

First of all, slander is spoken. Since I don't talk as a type (...most of the time), you mean to accuse me of libel - which again, I am not guilty of because libel or slander is to present false information as factual. The information is neither presented as factual nore false; it is my opinion and it is almost certainly true (though I leave room for the extremely unlikely possibility that it is incorrect).

And AGAIN, you are confusing two fundamental but equally seperate concepts of economics: Competition and Supply and Demand. Supply and Demand has *nothing* to do with competition - it is a macroeconomic force which is based on availability and consumption. When you say AMD 'couldn't've possibly supplied the chips' (which is false, by the way) - this doesn't have anything to do with whether "AMD's products were competitive with Intel's." It's that simple. You concede this point right up front when you try to turn it into a conversation about supply (otherwise you would say "AMD's parts suck" not "AMD couldn't make enough of them") and not competition.

Competition is about having a superior product to your is about product existing on the marketplace. Low supply itself, believe it or not, is not against anti-trust law, because generally speaking it is not illegal to not be able to make enough of your products. It is, however, illeagal to ration your customers' consumption from other suppliers by imposing financial penalties for buying from your competitors in the first place.

"Nowadays you can buy a CPU cheaper than the CPU fan." -- Unnamed AMD executive
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