Intel and AMD Could Settle Antitrust Lawsuit
An analyst has suggested that bitter rivals AMD and Intel could be about to kiss and make-up over their fractious lawsuit
Warring chip rivals Intel and AMD could be about to settle their differences over the antitrust lawsuit, according to analyst Tim Luke at Barclays Capital.
In a research note Luke said that a settlement would be beneficial to both Intel and AMD, and that he felt it could happen before the two sides are scheduled to go to trial in March 2010, in a Delaware courtroom.
Luke’s note came a day before AMD’s annual analyst day event, and a week after the N.Y. Attorney General’s office filed a lawsuit against Intel alleging anticompetitive practices. The N.Y. suit was the latest legal case dropped on Intel, which also is appealing a $1.45 billion (£880 million) fine from the European Union for similar charges.
Analysts also believe that the Federal Trade Commission, which also is investigating Intel, could level charges before the end of the year.
Intel officials have denied any wrongdoing in the cases, which allege that the chip maker used payments and coercion to limit the use of AMD products by Dell, Hewlett-Packard and IBM.
Despite all the legal issues mounting against Intel, a settlement could help AMD as well as its larger rival, Luke said.
Both sides would save on legal bills by ending a lawsuit that already has cost hundreds of millions of dollars, produced thousands of pages of evidence, and conducted 2,200 hours of depositions.
For AMD, ending the lawsuit would help it deal with its financials as its struggles to return to profitability, Luke said. It also would enable it to negotiate a new cross-licensing deal with Intel and possibly divest itself from its Globalfoundries holdings.
Globalfoundries was the company created earlier this year when AMD, in a joint venture with Advanced Technology Investment Co. of Abu Dhabi, spun off its manufacturing business.
Intel officials have said that Globalfoundries is not covered by the cross-licensing deal between their company and AMD.
For Intel, a settlement would end a good bit of uncertainty, Luke said.
