Intel and AMD Settle Antitrust, Patent Lawsuits

Kohenkatz writes "Intel has agreed to pay $1.25 billion to AMD. In return, AMD will drop its lawsuits about patent and antitrust complaints. The two companies released this joint statement: '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.' The press release also says, 'Under terms of the agreement, AMD and Intel obtain patent rights from a new 5-year cross license agreement,' and that 'Intel and AMD will give up any claims of breach from the previous license agreement.'"

Comments

Only $1.25 Billion?

[mantis2009]

Seriously, this number seems low to me. The pending suits against Intel alleged that for a decade Intel conspired to freeze AMD out of the market. Intel poisoned nearly all of AMD's potential customers. Surely that cost AMD a lot more than just a billion or so dollars in lost revenue.

Re:Only $1.25 Billion?

[Trepidity]

Intel poisoned nearly all of AMD's potential customers.

Yeah, you can bet I bought a Core 2 Duo after what happened to my coffee when I was researching a Phenom II...

Re:Only $1.25 Billion?

[brxndxn]

As an AMD shareholder and an enthusiast who has followed this 'case' since 1999, I also think this settlement is low. I do not believe $1.25billion could bump AMD to a cash position of where it would have been if Intel had not competed unfairly. Yes, it is a $1.25billion injection of direct profits to AMD - but the cashflow through the company over the years from the marketplace to R and D would have put AMD in a much more competitive position.

Re:Only $1.25 Billion?

[Moridin42]

Except that this is 1.25 billion dollars that AMD need make no sale to acquire. No materials costs, no QC costs. No manufacturing losses. Why should AMD (or anyone else) be concerned with revenues lost? They're only a way to secure profits. This is much closer to a billion dollars of profits, which is far more valuable than a billion dollars of revenue.

Re:Only $1.25 Billion?

[Interoperable]

Possibly; however, if it ever came down to an all-out litigious patent war, AMD may well have come out on top thanks to holding the rights to the x86-64 instruction set. It's not clear that AMD gets any real benefit other than getting to put the whole dispute behind them. I suspect that the real advantage that AMD gets out of this is the admission from Intel that they were engaging in illegal business practices. Intel has agreed to stop blocking AMD from OEM sales and will probably honor it considering that they've just admitted to bad behavior.

It looks to me like AMD thinks that they can compete based on their products despite the disadvantage that Intel has put them in through illegal means. I just hope that it means we get to see some chips from AMD that once again provide a much better performance/cost ratio than the Intel chips.

Re:Only $1.25 Billion?

[jimbolauski]

So now instead of Intel screwing AMD, Intel and AMD will be screwing the consumers, it's a win win!

Re:Only $1.25 Billion?

[TheNinjaroach]

I just hope that it means we get to see some chips from AMD that once again provide a much better performance/cost ratio than the Intel chips.

AMD processors are still beating Intel in the performance/cost ratio. They have been falling behind Intel on performance benchmarks alone, but the cost is cheap enough to make AMD a clear winner when comparing performance and cost.

I'm looking forward to the time where they once again provide better performance than Intel while also toting a cheaper price tag.

Re:Only $1.25 Billion?

[hattig]

Only recently AMD was clearing some debts for 30 cents on the dollar - i.e., the banks wanted money so bad that they allowed AMD to pay back one third of the amount they were willing to clear. AMD didn't have much spare money though, so they didn't clear much.

Imagine if AMD has another such offer on the table from their banks - they could clear far far more than the money they got from Intel. Getting the money now could have an overall net benefit greater than letting such a deal expire and getting a bit more from Intel in a couple of years. Never mind the interest payments they'll save paying them off now rather than in the future, even if there is no such deal.

I think putting everything behind them, getting freedom to manufacture as they like, and having a level playing field with the OEMs (sadly at a time when AMD's offerings aren't the shiniest) is more important to them.

Re:Only $1.25 Billion?

[Enderandrew]

Not to mention Intel has already been found guilty in other countries. I think that Intel had good reason to suspect the same might happen in the US. Intel did get off light.

I assume AMD took the deal because they have been hemmoraghing money for some time now. They needed a cash influx and couldn't afford to fight a legal battle much longer.

The sad thing here is that the end lesson is that illegal, anti-competitive practices can be quite beneficial. The US government overlooked them, even when a bevy of vendors testified on AMD's behalf, despite Intel threatening those vendors. Intel profitted not only in the immediate dollar sense, but also in gaining massive market share.

Yet the US threatened to go after Google if they had a search partnership with Yahoo. That is an evil monopoly that must be quashed (but it would be fine if Microsoft purchased Yahoo, swallowed their services, and removed choice and competition from the marketplace). None of this makes much sense.

What AMD needs to do - and quickly

[haruchai]

is to get its shit together Fab-wise. They've been leading Intel for nearly 10 years in developing or deploying new tech and architecture
but Chipzilla has always been able to keep abreast because of their fabrication prowess.

Now that Intel's Nehalem architecture has all of the elements that AMD has been delivering with the Athlon and its descendants,
they're back to being the budget brand.

Re:DOJ?

[Attila Dimedici]

I don't understand US law but if intel have done something worthy of an antitrust suit isn't it down to the DOJ to go after them?
Or was this some sort of civil antitrust suit?

The answers to your questions are in order: Yes and Yes.
If the DOJ thinks that Intel has done something worthy of an antitrust suit they can go after them (and the DOJ has been investigating Intel, so they still may). However, a non government entity can also bring an antitrust suit (although they have to demonstrate that they are in some way directly impacted by this behavior).

Huh? AMD's TDP is quite competitive with Intel

[Ritz_Just_Ritz]

According to Newegg:

AMD Phenom II X4 965 Black Edition Deneb 3.4GHz Socket AM3 125W Quad-Core Processor $199.99

Intel Core i7-975 Extreme Edition Bloomfield 3.33GHz LGA 1366 130W Quad-Core Processor $999.99

So I'll grant you that Intel's flagship i7 is faster than AMD's flagship Phenom II, but the Phenom has a slightly LOWER TDP and is 1/5 of the cost of the i7. Is the i7 4-5 times faster?