May 05, 2009 AMD, Intel dispute over pact still simmers GlobalFoundries says skirmish won't affect plans for Malta plant
By LARRY RULISON, Business writer
First published in print: Tuesday, May 5, 2009
MALTA - If there is any progress being made between Advanced Micro Devices Inc. and Intel Corp. over their long-standing technology-sharing agreement now in dispute the two chip companies won't say.
The skirmish has the attention of the local business and political community because AMD is currently the only customer of GlobalFoundries Inc., the Sunnyvale, Calif., company planning a $4.2 billion computer chip factory, or fab, in Malta.
AMD spun off GlobalFoundries two months ago as part of its move to adopt a "fabless" business model, a growing trend in the semiconductor industry. GlobalFoundries has been promised $1.2 billion in cash and tax breaks to build the 1.3 million-square-foot fab.
Intel, the world's largest producer of x86 chips used in personal computers and servers, told AMD on March 13 that it violated their 2001 patent cross-license agreement when it created GlobalFoundries.
Intel told AMD it would terminate the agreement within 60 days if the problem "has not been corrected," according to a March 16 filing AMD made with the U.S. Securities and Exchange Commission.
It's unclear, though, whether there will be any action later this month when the 60-day period expires.
Intel spokesman Chuck Mulloy told the Times Union on Monday that "there is nothing new to report on this issue."
AMD spokesman Michael Silverman also declined to elaborate Monday.
"The two parties are currently in dispute resolution, and we cannot discuss the matter further," Silverman said.
The 2001 agreement, which expires Jan. 1, 2011, says that senior management of the two companies are supposed to try to resolve any disputes on their own.
If that doesn't work, then either company can request a formal dispute resolution process in which they meet with a mediator for one day to consider alternatives to litigation.
They get another month to agree on how to proceed. If they can't, either side can take legal action. It's unclear where the two sides are in this process right now.
Disagreement between the two companies, which dominate the x86 market, is nothing new. For a long time, AMD has said that Intel violates antitrust laws with its sales practices, and AMD has a lawsuit pending in federal court in Delaware over the issue.
Meanwhile, GlobalFoundries has consistently said that the disputes between AMD and Intel will have no impact on its plans for Malta. The company is expected to start clearing a 222-acre site at Luther Forest Technology Campus as early as this week, with an official groundbreaking expected by mid-July.
Larry Rulison can be reached at 454-5504 or by e-mail at lrulison@timesunion.com.
