UPDATE #3: Intel capitulates, pays 1.25B USD to AMD
We have just received news from Drew Prairie of AMD that the anti-trust lawsuit that was supposed to start in March 2010 is not going to happen. In a press release published minutes ago, "Intel Corporation and Advanced Micro Devices (NYSE: AMD) today announced a comprehensive agreement to end all outstanding legal disputes between the companies, including antitrust litigation and patent cross license disputes."
The agreement means that AMD and Intel signed a new 5-year cross-license agreement over the x86 technology, "with both companies giving up any claims of breach from the previous license agreement." This statement is heavy in several orders of magnitude - first of all, AMD is now clear to have the relationship with GlobalFoundries as it is right now, and decades-old requirement for an x86 license is now a thing of the past [owning own manufacturing facilities].
Also, under the terms of settlement, Intel will pay AMD a sum of 1.25 billion US dollars and "agreed to abide by a set of business practice provisions. As a result, AMD will drop all pending litigation including the case in U.S. District Court in Delaware and two cases pending in Japan. AMD will also withdraw all of its regulatory complaints worldwide."
However, this deal does not include the recent lawsuit brought forward by NY State, even though we would now expect for that lawsuit to wind down – we might be wrong here, though.
This is a historic day for the x86 world in more ways than one and gives you a clear reason why Bruce Sewell traded a "retirement at Intel" for calm waters of Apple Inc. However, this agreement also paves the way for nVidia receiving an x86 license in case that Court of Delaware sides with nVidia in two open cases [cross license patent agreement between nVidia and Intel in regards to nVidia chipsets, Intel integrated graphics and Larrabee].
We view this agreement as a very positive step forward for Intel who decided to change its practices – this decision was obviously brought forward by Paul Otellini, who will be marked in history of Intel as the person that didn't just achieve greatest revenue and profit in history of the company, but also as the CEO who decided to change the semiconductor giant and abandons illegal practices. Now AMD can focus on innovation, while we have to see what kind of agreement will come between Intel and nVidia.
Update #1: November 12, 2009 at 15:31 GMT - AMD's CMO Nigel Dessau posted his view on the AMD - Intel settlement, you can read his points here.
Update #2: November 12, 2009 at 15:36 GMT - We have received a statement from Mr. Doug Grose, CEO of GlobalFoundries: "We're very pleased to see AMD and Intel reach settlement on this matter. We're also pleased that this resolution allows GLOBALFOUNDRIES to continue making products for AMD while aggressively pursuing new foundry customers. GLOBALFOUNDRIES remains focused on executing on our growth strategies including our planned integration with Chartered, following the successful closing of ATIC’s acquisition of the company.”
Update #3, November 12, 2009 at 16:18 GMT - We listened to the conference call with Intel's CEO Paul Otellini who recited the following statement: "Vast majority of Anti-trust cases settle out of court, because the anti-trust laws are massively complex and if the case proceeds, the damages are tripled…" followed by "Intel and AMD took a step back, looked at the claims that AMD was making while Intel looked at the claims that Intel was making. After a lengthy negotiations that started in Spring 2009 [following the findings of European Commission] and come to the conclusion that at this point, best path forward is to bring a closure to this matter."
This continued with the concluding part of the statement "The settlement involves several parts: AMD will receive 1.25 billion USD and will drop all antitrust legal cases globally. In return, we are dropping our claims that AMD breached its contract when it founded GlobalFoundries with the government of Abu Dhabi. This settlement is good for Intel, for our shareholders and employees."
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