AMD deal triggers Intel license warning

Update on October 9 at 9:00 a.m. with additional comments from Intel and AMD.

Advanced Micro Device's new manufacturing venture may come with some old baggage.

After AMD announced on Tuesday that it would spin off its manufacturing assets to a new company partially owned by the Abu Dhabi government, Intel was quick to warn AMD about patent and cross-licensing concerns.

AMD will own part of the new manufacturing entity, for the time being to be called The Foundry Company, while Advanced Technology Investment Co. (ATIC) will own the rest (55.6 percent) and have equal voting rights with AMD in The Foundry Company. The total investment is expected to come to approximately $8 billion.

Intel-AMD disputes are certainly not new. AMD sued Intel in 2005 alleging antitrust violations. But this time Intel has AMD in its sights.

At the moment, Intel is simply expressing concern about the deal, per the Patent Cross License Agreement between the two companies. (The two chipmakers have cross-licensing agreements that go back to 1976.)

The Agreement, which was signed in 2001 and expires in 2010, has restrictions related to the transfer of licenses and patents.

"We don't know enough yet. We have a lot of questions about how this deal is structured," said Intel spokesman Chuck Mulloy.

"According to the public statements they made in their press releases, they (ATIC) also have 50 percent voting rights. So we need to understand a lot more about it. We just have to do due diligence. Make sure that our IP (intellectual property) rights are protected."

AMD, for its part, believes the transaction is structured in a way that doesn't violate any agreements. "We are completely confident the structure of this transaction takes into account our cross-license agreements. Rest assured, we plan to continue respecting Intel's intellectual property rights, just as we expect them to respect ours," said AMD spokesman Drew Prairie.

[sythara]

...partially owned by the Abu Dhabi government...

Yes, this is just what we need actually.

[Zaunto]

This is what AMD needs at a time when banks are not extending credit. Either they die and Intel is the only CPU maker left, meaning no competition and higher prices, or they continue on with an investor who clearly isn't hobbled by the global economy. This is a win for AMD. Funding and manufacturing are no longer a problem so they can get back to the business of designing products that kick Intel and NVidia's butts all over the school yard. Intel just has their shorts in a bunch because AMD has an investor with MUCH deeper pockets than Intel. Intel is just worried about a repeat of the Opteron Butt kicking that they took a few years ago. Well it's about to happen again Intel, so get ready.

[techman21]

Yes, more American companies owned by Middle Eastern countries! Perfect!

[YankeePoodle]

American companies? AMD is a multi-national company, head-quartered in the US. That is it.
techman21 thinks all things middle-eastern are "terrorists", good luck with your ignorance.
What america needs less is ignorant Hobos, who have no idea about rest of the world.

[Zaunto]

AMD isn't owned by Dubai. Dubai has invested in an American company who's technology and vision they believe in. I've always believed in AMD's products. Not because it's an "American Company". Try and find an American company these days who doesn't have foreign investors of any kind. Try to find foreign companies who have no American investors of any kind. It's a global marketplace and having a foreign company invest in AMD levels the playing field against their competition- Intel and NVidia. Without competition, consumer choice is restricted and the "only game in town" would charge whatever they want while providing products that lack quality or have features none of us wants (Do Microsoft and Vista ring a bell??)

It would be nice if we could just segregate ourselves off from the rest of the world and not do any business with anyone outside of the USA wouldn't it? Those days are long in the past guys. If you don't like a Middle Eastern company investing in American companies then I recommend you make yourself a long list of products you don't want to buy because it is happening more often than you think.

[Squashman2]

We live in a Global Economy where even the governments themselves play apart in. Even the great Trek Bicylce company gets many of their parts from foreign countries.