Intel Lawyers Warn AMD over x86 License and Global Foundries, AMD Fires Back

Late last year, AMD finalized plans to spin off their manufacturing operations with help from investment from Abu Dhabi. The spinoff was then called The Foundry Company as a working title, which has now been changed to Global Foundries.

One issue that came up, courtesy of Intel spokesperson Chuck Mulloy, was that the new company might not have the right to produce x86 chips under the existing cross-license with Intel.

We examined this in some detail at the time, and decided Intel was just rattling its saber. For one thing, it’s generally believed that Intel doesn’t want AMD gone, since it would make them a monopoly. We also looked at the license agreement and spinoff plans.

Much of the license is confidential, and I’m not a lawyer, but it seemed that there was nothing Intel could really act on. We reached the conclusion, along with other observers, that AMD’s lawyers obviously didn’t come up with the spinoff without accounting for licensing issues.

But it appears that Intel disagrees, having officially informed AMD that they are materially breaching the agreement. If mediation efforts fail over 60 days, Intel can pull the plug on AMD’s side of the cross license, without affecting their own access to the technologies they get from AMD in the agreement.

Actually, Intel’s Beef is two-fold, dang it, now I want a fajita. The heart of the dispute seems to be whether the new company is a subsidiary of AMD’s or not. If we look at financial ownership, Intel’s claims sound good. ATIC and Mubadala, investment companies wholly owned by the government of Abu Dhabi, own most of Global Foundries.

In that sense, Global is a company in which AMD is invested, not a subsidiary, and doesn’t have access to the x86 license. The problem is, the public sections of the license discuss contributed assets and control, not financial ownership, as the defining points of a subsidiary. Our informal analysis found that Global Foundries is within the definition of a subsidiary.

Of course, that’s relying only on public bits of the agreement. The second avenue of this dispute involves Intel’s statement that there is something in the confidential parts of the license that backs up their concerns. This has opened up yet another conflict for AMD and Intel to hammer out: making the x86 license public.

Intel was keen to share their confidential concern with the world, or at least keen to make that impression. They claimed that they wanted to make the license public, but AMD refused. AMD said they’re up for making the license public, as long as Intel agrees to make something else public: the confidential evidence in the two companies’ anti-trust battle, which started in 2005 and might reach trial next year.

That’s pretty out of left field. While we would all love to know what’s going on in the anti-trust battle, confusing the issues means we’re unlikely to get more details on the Global Foundries question. Then again, AMD feels the issues aren’t separate to begin with, which we examine on the next page.