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AMD-Intel 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 on Monday, March 16, 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.

The competitors first formed the agreement in 1976, and renewed it most recently in 2001. Under the terms, 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 argues that GlobalFoundries is an outside entity, while AMD maintains it's a subsidiary. Intel has threatened to pull AMD's access to its licenses if the dispute is not resolved in 60 days.

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."

AMD has scoffed at Intel's claim, saying that it's a baseless diversion to remove attention from ongoing antitrust litigation against Intel. AMD has long accused Intel " which is out-performing AMD in the technology sales race " of monopolistic practices when it comes to marketing and sale of x86 architecture chips (which the Malta facility will be tooled to produce). A trial on the matter is slated for February 2010.

Intel has already been fined by the governments of Korea and Japan for similar allegations.

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