Details on the Intel-AMD bus cross-license agreement

Posted on Monday, May 26 2008 @ 07:25 CEST by Thomas De Maesschalck
FUD Zilla dug up some information on the patent cross-license agreement between AMD and Intel that will expire on January 1st, 2011. The latest contract was signed in early May 2001 and if AMD wants to continue manufacturing x86 processors they will need to renegotiate the contract in 2010.

The agreement contains some important limitations like the right to recall the license if AMD gets acquired by another company. This kinda limits the possibilities for firms that are interested in taking over AMD as a large chunk of the firm becomes as good as worthless if Intel recalls the license.
So let’s hypothesize for a second here. Let’s say Nvidia or IBM or any other of the rumored companies dares to buy AMD. By the current bus license agreement Intel could simply re-call the bus license leaving the acquired AMD worthless.

Intel could have some regulatory issues if they do something like that, but we all know that courts would take years to settle this kind of case and by that time anyone who would acquire AMD could easily go bankrupt.

The only option that AMD has at the moment is to sell some smaller parts of the fab and we are not sure that this would help the struggling chip maker. If they get things back together and make 45nm CPUs with decent clock speeds in late 2008, then we don’t think AMD will have to sell its fabs and selling them would just make AMD CPUs less price competitive compared to Intel and this is the last thing that AMD can afford right now.
More info over here.

About the Author

Thomas De Maesschalck

Thomas has been messing with computer since early childhood and firmly believes the Internet is the best thing since sliced bread. Enjoys playing with new tech, is fascinated by science, and passionate about financial markets. When not behind a computer, he can be found with running shoes on or lifting heavy weights in the weight room.

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