Rival chip makers AMD and Intel have settled their pending legal disputes in a deal that will include Intel paying its rival $1.25 billion and agreeing to a set of business practices. AMD officials had argued that Intel over the past few years had used anticompetitive practices to limit the use of AMD products by OEMs such as Dell, HP and IBM. The two sides also signed a new cross-patent deal.
Intel and Advanced Micro Devices have reached a settlement in all
the legal disputes between the two chip makers, including antitrust and
As part of the deal, Intel will pay AMD $1.25 billion and agree to a set of business practice provisions.
The two companies announced the settlement Nov. 12. Executives with
both companies are scheduled to speak about the settlement at 10 ET.
"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 two vendors said in a joint statement.
Included in the agreement is a new five-year cross-license agreement
between Intel and AMD, and the two chip makers will relinquish claims
that the other had breached the previous deal.
In return for the cross-patent deal and the $1.25 billion payment,
AMD will drop all pending legal action against Intel, including a
lawsuit filed in U.S. District Court in Delaware and two other cases in
Japan. In addition, AMD will withdraw all of its regulatory complaints
around the world.
The deal comes two days after Barclays Capital analyst Tim Luke suggested that a settlement in the lawsuit
could be near, saying that an agreement would benefit both companies.
It would let both sides save on legal bills that already have cost
the companies millions of dollars. That's particularly important to
AMD, which is working to get its financial picture back in order.
For Intel, the deal means getting one legal headache out of the way.
Still, the company faces other legal hurdles. The European Commission
in May fined the company $1.45 billion for anticompetitive practices.
In addition, the N.Y. Attorney General's Office last week filed a
lawsuit against Intel that echoed the European complaints, essentially
suggesting that Intel used a combination of bribery and coercion to
ensure that OEMs, including Dell, Hewlett-Packard and IBM, limited
their use of AMD products.
Analysts also believe that the Federal Trade Commission also could
file a complaint against Intel, possibly by the end of the year.