The top chip designers had been in battlegrounds since decades. Finally, Intel and AMD on Thursday said they are willing to settle all the legal disputes including antitrust litigation, for $1.25 billion.
The moment of joy was expressed by AMD CEO Dirk Meyer. He said the settlement leads both companies will bring a “new era” in the chip industry.
The two companies also sealed a five-year cross license deal and said they would give up any claims of breach from their previous license agreement.
“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,” AMD and Intel said in a joint statement.
Under the terms of the settlement, Intel will pay AMD $1.25 billion. Also:
- AMD and Intel both get patent rights in a cross-licensing pact;
- Intel will give up any patent claims against AMD;
- Intel will agree to adhere to business practice provisions;
- And AMD drops all pending litigation against Intel.
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 look forward to healthy competition with the mutual respect one would expect between world-class competitors.
It remains to be seen if this settlement marks a new chip era, but the “healthy competition” Meyer refers to will determine AMD’s fate.
Shares of AMD jumped 23 per cent to $6.55 in early trading on the New York Stock Exchange this afternoon. Intel shares were halted. Intel now expects spending in the quarter to be $4.2 billion, up from $2.9 billion.
So the “new Era” is about to begin where chip manufacturers respect the competition? What do you think?