Intel AMD License War
A lot has been happening the past few months in the chip manufacturing business. While on one hand Intel’s sales have been soaring, the tiny rival AMD has been struggling. Not many years ago, Intel was troubled at the rate which AMD was eating into it’s profits.
Today, Things are a bit different. Intel still maintains it’s monopoly in the microprocessor business. With sales just dwindling by the day, AMD had no choice, but to take drastic steps in order to be in a position to take on Intel. Among these, was shutting down it’s own manufacturing plants and raking in as many investments as possible from wherever possible.
The money did come in, in the form of Advanced Technology Investment Company (ATIC), an Abu Dhabi state owned venture capital firm that has pledged $2.1 billion. With this investment, ATIC will get a 55.6 per cent stake in the venture. &700 million will be paid to AMD, which will hold the remaining stake. As per the deal, both companies will have equal representation on the board.
Doug Grose, Senior Vice President of Technology at AMD will be the CEO of the new company, while Hector Ruiz, the current chairman of AMD will be the new chairman. Operations are planned at a new factory in New York next year with 1,400 employees.
All said and done, the optimistic plans for AMD haven’t gone down well with Intel, which has been vocal in questioning the deal. Intel claims that AMD and Intel have a patent cross-licensing agreement under which AMD pays royalties to Intel. With Controversy hitting out all around this development, what is left to be seen is the implication of the prices on AMD and ATI-based processors and cards.
AMD’s announcement now means that Intel is the last remaining company who both designs and manufactures chips themselves. INTEL WINS!
