Intel has "serious questions" about AMD spin off

Written by Tim Smalley

October 8, 2008 // 11:56 a.m.

Tags: #45nm #65nm #amd #cpu #fab #facilities #foundary #intel #law #license #litigation #manufacturing #outsource #production #spin-off #sue #suit

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.

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