x Abu Dhabi, UAE Friday 21 July 2017

AMD accepts $1.25bn to settle Intel disputes

Intel, the world's largest maker of computer chips, agrees to pay its biggest rival AMD US$1.25 billion to settle wide-ranging legal disputes.

Intel, the world's largest maker of computer chips, agreed to pay its biggest rival Advanced Micro Devices (AMD) US$1.25 billion (Dh4.59bn) to settle wide-ranging legal disputes. Mubadala, the strategic investment arm of the Abu Dhabi Government, is the largest shareholder of AMD with about a stake of almost 20 per cent. The agreement "marks the beginning of a new era, one that confirms that the game has changed for AMD", said Dirk Meyer, the president and chief executive of AMD.

"This is an important milestone for us, for our customers, for our partners and, most importantly, for consumers and businesses worldwide." Mr Meyer said that due to the regulatory agreement between Intel and AMD, Globalfoundries, the computer chip maker bought by Advanced Technology Investment Company of Abu Dhabi, will no longer be a subsidiary of AMD. Under terms of the deal, Intel and AMD will enter a new five-year patent cross-licensing deal and drop claims of breaches.

Intel also agreed to abide by a new set of standards for business practice. "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," the two companies said in a statement. Both have spent considerable time in court over anti-trust and patent licensing issues, with AMD alleging that Intel had provided discounts to customers if they avoided AMD's products.

Anti-trust regulators in the US, Europe and Asia have taken action against Intel after complaints made by AMD that Intel deliberately acts to keep its competitors at a strategic disadvantage for several years. In May, the EU levied a ?1.06bn (Dh5.81bn) fine against Intel after an eight-year investigation found it had violated competition rules. Upon news that the settlement has been reached, investors sent AMD's stock up more than 25 per cent in trading on the New York Stock Exchange to $6.62 a share.

The company's stock has more than doubled this year. dgeorgecosh@thenational.ae