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Intel has "serious questions" about AMD spin off

Intel has "serious questions" about AMD spin off

Intel said last night that it has some serious questions about AMD's intention to spin off its manufacturing facilities into a separate business unit currently known as The Foundry Company.

Intel said last night that it has some serious questions about AMD's intention to spin off its manufacturing facilities into a separate business unit currently known as The Foundry Company.

Intel and AMD have a cross-licensing agreement which regulates many aspects of CPU design and manufacturing - AMD pays Intel royalties for an x86 license, for example, and that is believed to be a part of the licensing agreement between the two companies.

"Intel has serious questions about this transaction as it relates to the license and will vigorously protect Intel’s intellectual property rights," said Intel's Chuck Mulloy in an interview with Reuters.

Under the terms of the licensing agreement, AMD is not allowed to share or transfer any of Intel's technologies to a third party. This means that if AMD is acquired, the new company will not be allowed to produce x86 microprocessors or utilise any of Intel's technologies.

X-bit labs says that under the terms of the agreement, AMD is allowed to outsource part of its production, but only 20 percent of AMD's total output can be contracted. With the current plans to spin AMD's manufacturing facilities off into a separate entity, all of the company's production would essentially be outsourced.

The x86 cross-licensing agreement and its transferability have also limited the prospects of other companies like Nvidia and VIA too, effectively controlling competition for Intel some might argue. However, if AMD fails to attain and even semi-competitive position, Intel is well aware that it could find itself on the forefront of some (even stronger) anti-competitive backlash as there's already a history of litigation between the two companies that goes back a few years.

Will AMD get its way? Or will Intel step in and the lawyers will get some Christmas bonuses? Let us know your thoughts in the forums.

14 Comments

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DougEdey 8th October 2008, 13:00 Quote
Surely AMDs lawyers (insert Mr Burns' here) will have studied this furiously?
liratheal 8th October 2008, 13:11 Quote
Quote:
Originally Posted by DougEdey
Surely AMDs lawyers (insert Mr Burns' here) will have studied this furiously?

I think you might be expecting a little too much, there :p
biebiep 8th October 2008, 14:47 Quote
The Foundry Company + AMD Designers = AMD conglomerate

They just have to keep the license at the top of the food chain and it's still their company making everything from an accountants point of view.
Rocket733 8th October 2008, 15:04 Quote
I think the bigger worry is for Intel to be slapped with a government investigation for being a monopoly. With AMD market share falling and no one else producing x86 microprocessors Intel could find itself in a situation similar to that of Corning way back in the day when they patented a process to mass produced lightbulbs. The government decided the technology was too important to be controlled by a single company and forced Corning to share the technology with GE.
Sebbo 8th October 2008, 17:25 Quote
AMD owns 46% of FC, so is it still really outsourcing?
MasterYoda34 8th October 2008, 18:29 Quote
Intel will never revoke AMD's x86 license. If they did, Intel would instantly become a monopoly and that would have far more consequences for Intel than allowing AMD to outsource their x86 production. I think AMD knows this and is essentially playing a game of chicken with Intel.
Hugo 8th October 2008, 18:50 Quote
Quote:
Originally Posted by Sebbo
AMD owns 46% of FC, so is it still really outsourcing?
Yes.
Tim S 8th October 2008, 19:07 Quote
AMD would have to be the majority owner of The Foundry Company for it not to be outsourcing...
HourBeforeDawn 8th October 2008, 21:18 Quote
ehh Intel is just afraid of the possible outcome so of course they are going to do what they can to slow AMD down. I mean really I dont think Intel wants to lose its crown again for like 6 years like last time lol.
Zytek_Fan 9th October 2008, 01:01 Quote
Stop making stupid legal moves, Intel.
The Foundry Company is completely legal.
leviathan18 9th October 2008, 05:11 Quote
intel cant kill amd or they become a monopoly
1ad7 9th October 2008, 07:07 Quote
I didnt think of this... hmm well I doubt intel would pursue this too heavily due to the anti trust issues it could create
KrylonArt 10th October 2008, 17:41 Quote
I personally think AMD probably is violating the cross-license agreement, but think Intel would turn it into a legal matter. Instead, Intel might attempt use it as a bargaining chip to convince AMD to drop the anti-trust suits against Intel. "Look, I won't sue you for violating our cross-licensing agreement and prevent you from making any chips... but you gotta drop the lawsuits against me."
grndzro7 14th November 2008, 23:38 Quote
Intel using that to force AMD to drop the lawsuit can't work. If Intel sues AMD for breaking the cross licensing agreement and wins then AMD shuts down.

If that happens Intel will be found to have a monopoly and all their Tech/Patents would be up for the birds. AMD would get government backing to put them back on track as well as full use of Intel patents.

Intel would never pull the trigger on that one.
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