Intel Corp will pay US$1.25 billion to make peace with Advanced Micro Devices Inc, as the companies whose microprocessors run nearly all personal computers finally found common ground in a bitter and colorful dispute that caused international antitrust trouble for Intel.
The settlement announced on Thursday sent AMD stock soaring and ended a four-year-old lawsuit in which AMD accused Intel of abusing its dominance of the chip market to keep a lid on AMD’s share. Intel has about 80 percent of the microprocessor market and AMD has about 20 percent.
According to the lawsuit, Intel penalized computer makers for using AMD’s chips or offered them financial incentives — payments that a Toshiba Corp manager likened to “cocaine.” Executives from Gateway complained that Intel’s threats of retaliation for working with AMD beat them “into guacamole.”
DEFENSE
Intel has defended its practices, saying it simply offered rebates to big customers, which allowed them to pass lower PC prices to consumers. A microprocessor can account for 15 to 20 percent of the cost of a computer, said Martin Reynolds, a vice president with the Gartner Inc research firm.
But despite Intel’s stance it did nothing wrong, the AMD lawsuit, which was scheduled to go to trial in Delaware in March, was one of Intel’s biggest headaches. Squashing the case removes the possibility Intel would be on the hook for even more if it lost at trial, Intel CEO Paul Otellini said.
“While it pains me to write a check at any time, in this case I think it was a practical settlement,” Otellini said on a call with analysts.
Intel shares fell US$0.16, 0.8 percent, to close at US$19.68 on Thursday.
The settlement will help AMD whittle its US$3.7 billion in debt.
Its shares jumped US$1.16, or 22 percent, to close at US$6.48. But even before Thursday, AMD’s complaints had their desired effect: Antitrust regulators in several countries filed cases against Intel based on AMD’s accusations — cases that won’t disappear because of the settlement.
INVESTIGATION
The US Federal Trade Commission is investigating Intel, and regulators in Europe have fined Intel a record US$1.45 billion. Intel has paid the fine but is appealing it. EU spokesman Jonathan Todd said on Thursday that the European Commission “takes note” of Intel’s settlement with AMD but that it does not change Intel’s duty to comply with European antitrust law.
Regulators in South Korea have fined Intel US$18.6 million — Intel is appealing that as well — and last week New York Attorney General Andrew Cuomo filed a federal lawsuit accusing Intel of using “illegal threats and collusion” to dominate the chip market “with an iron fist.” In 2005, Japan’s Fair Trade Commission found that Intel violated antitrust rules there. Intel accepted that ruling without admitting wrongdoing.
Under the terms of the new agreement, AMD and Intel entered into a new, five-year cross-licensing deal. Intel dropped claims that AMD breached the earlier agreement. And AMD is dropping all litigation against Intel.
“It is a pivot from war to peace,” Tom McCoy, AMD’s top lawyer, said.
MORE VISITORS: The Tourism Administration said that it is seeing positive prospects in its efforts to expand the tourism market in North America and Europe Taiwan has been ranked as the cheapest place in the world to travel to this year, based on a list recommended by NerdWallet. The San Francisco-based personal finance company said that Taiwan topped the list of 16 nations it chose for budget travelers because US tourists do not need visas and travelers can easily have a good meal for less than US$10. A bus ride in Taipei costs just under US$0.50, while subway rides start at US$0.60, the firm said, adding that public transportation in Taiwan is easy to navigate. The firm also called Taiwan a “food lover’s paradise,” citing inexpensive breakfast stalls
TRADE: A mandatory declaration of origin for manufactured goods bound for the US is to take effect on May 7 to block China from exploiting Taiwan’s trade channels All products manufactured in Taiwan and exported to the US must include a signed declaration of origin starting on May 7, the Bureau of Foreign Trade announced yesterday. US President Donald Trump on April 2 imposed a 32 percent tariff on imports from Taiwan, but one week later announced a 90-day pause on its implementation. However, a universal 10 percent tariff was immediately applied to most imports from around the world. On April 12, the Trump administration further exempted computers, smartphones and semiconductors from the new tariffs. In response, President William Lai’s (賴清德) administration has introduced a series of countermeasures to support affected
CROSS-STRAIT: The vast majority of Taiwanese support maintaining the ‘status quo,’ while concern is rising about Beijing’s influence operations More than eight out of 10 Taiwanese reject Beijing’s “one country, two systems” framework for cross-strait relations, according to a survey released by the Mainland Affairs Council (MAC) on Thursday. The MAC’s latest quarterly survey found that 84.4 percent of respondents opposed Beijing’s “one country, two systems” formula for handling cross-strait relations — a figure consistent with past polling. Over the past three years, opposition to the framework has remained high, ranging from a low of 83.6 percent in April 2023 to a peak of 89.6 percent in April last year. In the most recent poll, 82.5 percent also rejected China’s
PLUGGING HOLES: The amendments would bring the legislation in line with systems found in other countries such as Japan and the US, Legislator Chen Kuan-ting said Democratic Progressive Party (DPP) Legislator Chen Kuan-ting (陳冠廷) has proposed amending national security legislation amid a spate of espionage cases. Potential gaps in security vetting procedures for personnel with access to sensitive information prompted him to propose the amendments, which would introduce changes to Article 14 of the Classified National Security Information Protection Act (國家機密保護法), Chen said yesterday. The proposal, which aims to enhance interagency vetting procedures and reduce the risk of classified information leaks, would establish a comprehensive security clearance system in Taiwan, he said. The amendment would require character and loyalty checks for civil servants and intelligence personnel prior to
RSS