Breakthrough: AMD and Intel settle antitrust dispute, reach new cross-license agreement

Thursday, November 12, 2009 14:20

Intel has made a statement to Betanews this morning that it and Advanced Micro Devices are settling their long, outstanding legal disputes, including pending antitrust litigation in Delaware court, with Intel agreeing to pay AMD .25 billion.

Intel will also agree to abide by a new set of business practices, which may be announced in a matter of minutes. It’s over.

“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,” reads Intel’s statement this morning.

10:55 am EST November 12, 2009 · “The agreement to us signals a new era. It’s a pivot from war to peace,” announced AMD Executive Vice President for Legal Affairs Tom McCoy, in a statement that could entitle the opening of a new chapter in the x86 computing era.

With poignant and historic language, AMD executives this afternoon announced the end of the intellectual property and business practices dispute with Intel that at one time, from a marketing perspective, defined AMD as a company. Intel’s executives’ statements remain forthcoming at this time. But AMD CEO Dirk Meyer explained today’s agreement has three categories:

1. Intel will agree to new ground rules for corporate business practices.

2. A new, five-year patent cross-license agreement between AMD and Intel will give both companies broad access to each other’s technologies.

3. GlobalFoundries, the manufacturing arm of AMD that was spun off as a subsidiary, may now be completely separated from AMD and operate independently. Under the previous cross-license agreement with Intel, GF had to operate as an AMD subsidiary in order for AMD to share Intel intellectual property with it — the old agreement prohibited AMD sharing Intel trade secrets with another company. The new agreement permits such sharing specifically with GF.

However, we learned this morning, not all business practices to which AMD and certain other governments had been objecting, will be covered by Category 1 of the agreement. Specifically, from AMD’s point of view, it appears only Intel conduct with regard to limiting end users’ choices between AMD and Intel technology, will be curbed. But business practices such as volume rebates to OEMs may (perhaps) be allowed, so long as they are not exclusionary — specifically, as long as they are not structured in such a way that OEMs promise not to purchase AMD parts, or to hold AMD purchases to specified caps.

We’ll learn more from Intel’s point of view in a few minutes. In advance of Intel’s statement, that company has already released an update to its financial guidance, increasing its business expenditures to account for the one-time charge of .25 billion to be paid to AMD.