Intel and AMD today announced a comprehensive agreement to end all outstanding legal disputes between the companies, including antitrust litigation and patent cross license disputes.
In a joint statement the two companies commented, “While the relationship between the two companies has been difficult in the past, this agreement ends the legal disputes and enables the companies to focus all of our efforts on product innovation and development.”
Under terms of the agreement, AMD and Intel obtain patent rights from a new 5-year cross license agreement, Intel and AMD will give up any claims of breach from the previous license agreement, and Intel will pay AMD $1.25 billion. Intel has also agreed to abide by a set of business practice provisions. As a result, AMD will drop all pending litigation including the case in U.S. District Court in Delaware and two cases pending in Japan. AMD will also withdraw all of its regulatory complaints worldwide. The agreement will be made public in filings with the Securities and Exchange Commission.
AMD Media and Analyst Conference Call Transcript – Remarks from AMD President and Chief Executive Officer Dirk Meyer
Dirk: Good day everyone … and thank you for joining us. For the past few years, we have been very open in outlining the major steps in AMD’s transformation into a processing powerhouse:
• From the acquisition of ATI Technologies;
• To the formation of GLOBALFOUNDRIES; and
• The creation of AMD-The Product Company,
o with a single business unit,
o a reinvigorated roadmap,
o a new business model,
o And a close relationship with a world-class leadingedge foundry.
Today, I am pleased to announce the last major component of that transformation – in the form of a transparent and public agreement with Intel to create a level playing field in the x86 processor industry – taking us one big step closer to achieving our bold vision. There are three key components to the agreement:
• First, Intel has agreed to an important set of ground rules that we hope will define the path to a free and open market in the microprocessor industry;
• Second, we have agreed to a new patent cross-license agreement that gives AMD broad rights and the freedom to operate a business utilizing multiple foundries,
• And third, GLOBALFOUNDRIES has agreed to terms that allow them the freedom to operate as an independent world-class leading-edge foundry company, going forward, without being a subsidiary of AMD.
In addition, Intel has agreed to pay AMD $1.25 billion.
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.
We recognize that it will take time for people to understand how the operating conditions in processor business have changed – but make no mistake – they have changed. I would like to thank the regulatory agencies around the world for their diligence and consistency. Their work has enabled us to achieve this milestone. We are optimistic they will continue their vigilance in maintaining a fair playing field, especially with
respect to pricing practices in our industry.
Looking forward three keys to our continued success:
– Compelling offerings;
– Access to customers,
– And a winning business model.
We are confident this agreement will remove any concerns about customer access and our business model.
We look forward to healthy competition with the mutual respect one would expect between world-class competitors.