AMD has come out firing, with an SEC filing and loads of comments claiming that Intel’s concerns are an attempt to mess with AMD and possibly to divert attention from the antitrust suit. AMD’s Director of Investor Relations, Ruth Cotter, wrote: “Should this matter proceed to litigation, we will prove not only that Intel is wrong, but also that Intel fabricated this claim to interfere with our commercial relationships and thus has violated the cross-license.”
So AMD isn’t just denying Intel’s accusation, they are accusing Intel of making the accusation for dishonest reasons. That would bode poorly for Intel on the anti-trust front, and, AMD claims, is itself a breach of the cross license. From the SEC filing:
“In addition, the Company [AMD] has informed Intel that the Company maintains that Intel’s purported attempt to terminate the Company’s rights and licenses under the Cross License itself constitutes a material breach of the Cross License by Intel which gives the Company the right to terminate Intel’s rights and licenses under the Cross License Agreement while retaining the Company’s rights and licenses under the Cross License Agreement.”
So things appear to be heating up, and those mediators certainly have an interesting 60 days on their hands. If Intel and AMD stick to their guns, what happens after 60 days?
Assuming Intel and AMD are still at odds when the mediation period is over, Intel sends AMD a letter that says they can’t make x86 chips anymore. And AMD keeps making them. Intel will go to court to try and stop AMD, which will likely take years. The license is up for renegotiation in 2011 anyway.
Plus, the question remains: is Intel really that hot on killing off AMD and invoking the monopoly legislation of dozens of countries? John Dvorak points out that if there is a lawsuit to be had, and Intel doesn’t give it a shot, they leave themselves open to being sued by their own shareholders for not doing their jobs and defending investors’ interests.
It might just be an attempt to generate leverage for Intel in their negotiation of the new cross-license. It could even give them a bargaining chip if the anti-trust trial finally gets underway next year, and Intel decides or is forced to settle.
If Intel is just covering all of its bases to keep shareholders, or just tossing some fud AMD’s way, this will likely be wrapped up by the end of the mediation period. If we haven’t heard the end of it by then, we will be hearing about it for years.