Intel & AMD Settle Ancient Feud For $1.25 Billion

Nov 12 2009, 11:04am CST | by Robert Evans

One of the longest-running conflicts in the electronics world ended today, with the announcement (via Bloomberg.com) that Intel has agreed to pay AMD $1.25 billion as part of a legal-settlement. This ends a four-year long legal battle between the two companies, and the announcement was met with an astonishing 27% jump in AMD stock.

The agreement both manufacturers came to gives them a cross-license pact that will settle all outstanding claims of breach of the prior contracts. Intel agreed to abide by a new set of business-practice provisions as well, although the details of those provisions remain unknown. This is good news for both AMD and Intel. The former company will no longer suffer from Intel's practice of giving discounts to customers that don't use AMD products. This 'embargo' has done a lot of damage to AMD over the last few years.

Intel, on the other hand, wins by paying a comparatively small sum to AMD. Bloomberg states that analyst Hans Mosesman says that, by agreeing to these provisions, Intel may have avoided a charge of as much as $10 billion. The market's reaction to this certainly seems to indicate that they believe an AMD no longer hampered by the drain of Intel's embargo or this lawsuit is in a position to see major resurgence.

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Robert Evans
The excitement about new smartphones, tablets and anything mobile drive Robert to unearth the latest rumors and developments in this fast moving space. He adopted 4G as soon as it become available and knows where the mobile market is going.
Robert can be contacted directly at robert@i4u.com.