Intel and AMD bury the hatchet under $1.25 billion in cash

Inte logoAMD and Intel have agreed to settle all legal and patent disputes between them. Intel will pay AMD $1.25 billion and agrees to change certain unspecified business practices.

Intel and AMD are fierce competitors in the world of chipmaking, but in recent years they've taken the fight to the courtroom. AMD has sued Intel for antitrust violations (allegations that have been picked up by a number of governments), while Intel fired back by claiming that AMD had violated a licensing agreement for x86 technology. This morning, however, the two companies made a surprise announcement: they've reached an agreement that settles all legal issues between them.

The statement is short on information; both companies will flesh out the details during press/analyst calls later this morning. However, it does have a few eye-popping details, first and foremost among them a cash payment: Intel will be handing $1.25 billion over to AMD. The agreement also includes limits on Intel's business practices; these aren't specified in the statement, but undoubtedly limit the rebates and bulk buying agreements that Intel has used in the past to keep OEMs from jumping ship to AMD.

The two parties will also drop their patent dispute and commit to another five-year cross licensing agreement.

There's something in this for both parties. Intel was facing AMD suits both in the US and Japan, and AMD was filing complaints with just about any government that appeared willing to listen. This won't stop any government cases against Intel that are already in progress, and won't prevent any governments from investigating Intel on their own. But, without a major company pushing for these investigations, it's likely that Intel can start focusing on clearing out existing cases without the worry that new ones will continue to appear.

The business practices that Intel has agreed to avoid are undoubtedly the same ones that have been getting it in antitrust hot water lately, so they've probably been discontinued already. The formal agreement may help Intel argue that its misbehaving days are in the past, which can help with both settling existing cases and avoiding future ones. As for the cash, Intel has just demonstrated it can handle even larger payments (the EU hit them with a €1.5 billion fine) without missing a beat.

Given that Intel was unlikely to continue practices that were leading to massive fines anyway, AMD is primarily coming out of this with three things: vindication, reduced legal bills, and the cash. The latter two are what really matter, given that the company has been building up a hefty pile of debt in recent years. The company has $1.5 billion in cash on hand, and has recently gotten much closer to profitability (it's non-GAAP numbers actually show a profit), but its purchase of ATI and frequent reorganizations has left it with around $5 billion in debt to pay off. An extra $1.25 billion will go a long way towards assuring investors that it can continue to pay down this debt.

Source: ars technica

Tags: AMD, Intel

Comments
Add comment

Your name:
Sign in with:
or
Your comment:


Enter code:

E-mail (not required)
E-mail will not be disclosed to the third party


Last news

 
Consumer group recommends iPhone 8 over anniversary model
 
LTE connections wherever you go and instant waking should come to regular PCs, too
 
That fiction is slowly becoming a reality
 
The Snapdragon 845 octa-core SoC includes the Snapdragon X20 LTE modem
 
Human moderators can help make YouTube a safer place for everyone
 
Google says Progressive Web Apps are the future of app-like webpages
 
All 2018 models to sport the 'notch'
 
The biggest exchange in South Korea, where the BTC/KRW pair is at $14,700 now
The Samsung Galaxy A5 (2017) Review
The evolution of the successful smartphone, now with a waterproof body and USB Type-C
February 7, 2017 /
Samsung Galaxy TabPro S - a tablet with the Windows-keyboard
The first Windows-tablet with the 12-inch display Super AMOLED
June 7, 2016 /
Keyboards for iOS
Ten iOS keyboards review
July 18, 2015 /
Samsung E1200 Mobile Phone Review
A cheap phone with a good screen
March 8, 2015 / 4
Creative Sound Blaster Z sound card review
Good sound for those who are not satisfied with the onboard solution
September 25, 2014 / 2
Samsung Galaxy Gear: Smartwatch at High Price
The first smartwatch from Samsung - almost a smartphone with a small body
December 19, 2013 /
 
 

News Archive

 
 
SuMoTuWeThFrSa
     12
3456789
10111213141516
17181920212223
24252627282930
31      




Poll

Do you use microSD card with your phone?
or leave your own version in comments (4)