On November 12 AMD and Intel issued a joint press release announcing they had reached a settlement in the longstanding legal battle between the two companies. AMD began their legal actions because of anti-competitive practices Intel engaged in earlier this decade. The world's largest manufacturer of semiconductor chips was accused of paying OEMs and retailers, through the use of discounts and rebates, to not use or sell products with AMD processors. Intel's attempts to drive AMD out of business led the company to file anti trust lawsuits and petition governments to conduct criminal anti trust investigations.
The European Commission recently agreed with AMD's complaints and fined Intel approximately $1.45 billion. With the EC setting a precedent, Intel has decided the risks of losing more cases aren't worth the costs. In early November, New York's Attorney General opened a case against Intel. In America, the risks of losing a case are far greater because the damages awarded are several times those in European courts.
With this settlement neither company will acknowledge any wrongdoing. AMD was accused of breaching their x86 license by outsourcing the production of a majority of their CPUs. The settlement awards AMD with 4 major things. The first is $1.25 billion in cash within 30 days. This amount is assumed to cover the legal costs AMD incurred fighting Intel. The second concession is an agreement on which business practices Intel can engage in.
The third concession involves Intel agreeing to drop AMD's in house production requirement in the x86 license. Intel opposed the creation of Global Foundries, an independent semiconductor plant created by the divestiture of AMD's foundry business, and argued this breached the x86 license agreement. With this concession AMD has begun immediate preparations to fully divest all of their manufacturing plants. By selling their ownership in production facilities AMD will be able to increase their cash reserves and devote more of their resources towards research and development. The 4th concession allows AMD to manufacturer their x86 CPUs at whichever plant they choose.
AMD awarded Intel with an agreement to drop all of their private suits against the company and retract all regulatory complaints against Intel. By informing government regulatory bodies they have settled their differences, it increases the chances these agencies will drop their investigations of Intel. Intel is trying to stop the bleeding of what could become many billions of dollars if they continue to lose antitrust cases.
With greater protection from Intel's business practices, and more cash available, AMD will be able to devote their resources to developing a new CPU architecture that will keep them competitive. However, AMD is still loaded with debt. If they are successful in the years ahead they will become the first company to make a sustainable business out of fabless x86 CPU design.
Thanks to AnandTech for the source of this article: AnandTech
The European Commission recently agreed with AMD's complaints and fined Intel approximately $1.45 billion. With the EC setting a precedent, Intel has decided the risks of losing more cases aren't worth the costs. In early November, New York's Attorney General opened a case against Intel. In America, the risks of losing a case are far greater because the damages awarded are several times those in European courts.
With this settlement neither company will acknowledge any wrongdoing. AMD was accused of breaching their x86 license by outsourcing the production of a majority of their CPUs. The settlement awards AMD with 4 major things. The first is $1.25 billion in cash within 30 days. This amount is assumed to cover the legal costs AMD incurred fighting Intel. The second concession is an agreement on which business practices Intel can engage in.
The third concession involves Intel agreeing to drop AMD's in house production requirement in the x86 license. Intel opposed the creation of Global Foundries, an independent semiconductor plant created by the divestiture of AMD's foundry business, and argued this breached the x86 license agreement. With this concession AMD has begun immediate preparations to fully divest all of their manufacturing plants. By selling their ownership in production facilities AMD will be able to increase their cash reserves and devote more of their resources towards research and development. The 4th concession allows AMD to manufacturer their x86 CPUs at whichever plant they choose.
AMD awarded Intel with an agreement to drop all of their private suits against the company and retract all regulatory complaints against Intel. By informing government regulatory bodies they have settled their differences, it increases the chances these agencies will drop their investigations of Intel. Intel is trying to stop the bleeding of what could become many billions of dollars if they continue to lose antitrust cases.
With greater protection from Intel's business practices, and more cash available, AMD will be able to devote their resources to developing a new CPU architecture that will keep them competitive. However, AMD is still loaded with debt. If they are successful in the years ahead they will become the first company to make a sustainable business out of fabless x86 CPU design.
Thanks to AnandTech for the source of this article: AnandTech
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