Intel-AMD dispute flares up

A disagreement between Intel and Advanced Micro Devices could affect plans for a $4.2 billion microchip manufacturing facility planned for the Luther Forest Technology Campus in Malta.

According to information filed with the Securities and Exchange Commission by AMD, Intel has challenged AMD's decision to spin off its manufacturing elements into the new GlobalFoundries company, saying that it violates a longstanding cross-licensing agreement between the two companies.

In that agreement, the competitors share certain technologies vital to the design and manufacture of next generation microchips, but cannot share that information with a third party. Intel says AMD's asset light strategy and the formation of GlobalFoundries is a clear breach, while AMD says that it's within its rights.

"AMD cannot unilaterally extend Intel's licensing rights to a third party without Intel's consent," said Bruce Sewell, senior vice president and general counsel for Intel, in a statement. "We have attempted to address our concerns with AMD without success since October. We are willing to find a resolution but at the same time we have an obligation to our stockholders to protect the billions of dollars we've invested in intellectual property."

GlobalFoundries was formed in early March with investments from AMD and the Abu Dhabi-based Advanced Technology Investment Company. The two split representation on the board of directors. GlobalFoundries will be expected to take orders from other companies, but at the moment AMD is its only customer.

Furthermore, AMD's SEC filing says that Intel's attempts to challenge the cross-licensing agreement is a violation of the agreement itself, and allows AMD to terminate its rights and licenses used by Intel while retaining its competitor's.

The cross-licensing dispute is not new. Intel raised an eyebrow when AMD announced it would be spinning off its manufacturing elements in October, though it did not raise a formal challenge at the time.

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