Intel to pay AMD $1.25bn in settlement agreement
Rivals bring an end to years of antitrust and IP disputes and collaborate on new patent cross-licensing agreement
In a surprise move over the weekend, new AMD president and CEO Dirk Meyer stated that the company is settling all antitrust and intellectual property disputes with rival Intel, bringing to an end years of accusations and lawsuits.
The decision is said to be part of AMD's aim of becoming a processing powerhouse, which entails "a transparent and public agreement with Intel to create a level playing field in the x86 processor industry". X86 processors are used to run PC operating systems, including Microsoft's Windows and Linux options.
As part of the agreement, Intel will comply to set ground rules for an open market in the industry and pay AMD $1.25 billion. But moving beyond just starting with a clean slate, the two companies have also signalled their interest to collaborate by entering into a new patent cross-license agreement.
"Today marks the beginning of a new era... one that confirms that the game has changed for AMD. It is an important milestone for us, for our customers, our partners, and most important - for consumers and businesses worldwide. In addition, it represents the culmination many years of litigation and regulatory engagement. And we are optimistic that it will usher a new era for our industry," Meyer stated in a media conference call on November 12th.
Intel still faces heat from regulators both in the United States and Europe on charges of anti-competitive behaviour. It is in the process of appealing a European Union ruling that included a $1.45 billion fine but also has to deal with a U.S. Federal lawsuit filed earlier this month.
Meyer also clarified that Globalfoundries will operate as an independent foundry company and will not be a subsidiary of AMD going forward. The firm was launched in October last year through a deal with the Abu Dhabi government-owned Advanced Technology Investment Company, which bought a majority share in AMD's chip manufacturing business that was spinned off to found Globalfoundries.
Globalfoundries has been in the news recently after ex-CEO Hector Ruiz resigned amid allegations that he was linked to an insider trading scandal in the US.