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.
`Intel’s antitrust problem is growing, and so far they have failed to convince a single antitrust agency anywhere in the world that their business practices are fair, lawful and pro-consumer. And by the way, they don’t deny the evidence detailing their business practices,` said AMD spokesman Michael Silverman.
Judging from the official tone from both companies, the validity of Intel’s cross-licensing woes might be decided in court, where the question will be whether or not GlobalFoundries is a subsidiary of AMD.
GlobalFoundries was formed in early March with investments from AMD and the Abu Dhabi-based Advanced Technology Investment Company. The two have agreed to split representation on the board of directors, and the company is expected to take orders from many technology makers, though AMD is its only customer so far.
Intel raised concerns over the cross-licensing agreement in October, when the spinoff company was proposed, and AMD has said and maintains that such allegations are false and that their plans for the Malta facility will go ahead.
`This matter has no impact on GlobalFoundries operations, long-term growth or customer acquisition plans,` said Travis Bullard, a spokesman for GlobalFoundries. `We remain committed to building out the customer-facing elements of our business and investing in capacity in Dresden and New York.`
In a further twist, AMD’s SEC filing indicates it believes Intel’s efforts to terminate the cross-licensing agreement actually breeches it, which allows AMD to cancel Intel’s rights and licenses.“