Intel-AMD dispute threatens to terminate agreement

PHOTOGRAPHER: Stephen Williams

A dispute between Intel Corp. and Advanced Micro Devices that could affect plans for computer chip manufacturing here has escalated.

Intel, which currently licenses some chip designs to arch-rival AMD, has threatened to terminate that agreement based on AMD’s formation of the new GlobalFoundries company, according to information AMD filed with the Securities and Exchange Commission today.

GlobalFoundries plans to start construction of a new $4.2 billion factory at the Luther Forest Technology Campus within weeks, where it will make chips for AMD.

According to the SEC filing, Intel has written to AMD to say transferring the technology to GlobalFoundries “committed a material breach of the cross license.”

It says the cross-licensing agreement between the two companies will be terminated in 60 days if the breach is not corrected.

Intel’s argument is that GlobalFoundries is a new third party not subject to the licensing agrement, which has been in place for decades.

AMD, in the same SEC filing, said it believes the agreement is not being breached, and Intel has no right to terminate it.

GlobalFoundries, which took over AMD’s manufacturing operations as of two weeks ago, is nearly two-thirds owned by the Advanced Technology Investment Co. of Abu Dhabi, but AMD controls half of the board of directors.

AMD has a long-standing series of legal actions against Intel, charging its larger rival with engaging in monopolistic business practices.

Previously, an Intel spokesman has said the company is concerned about its intellectual property rights, but didn’t want to stop the spin-off of AMD’s manufacturing.