Intel Threatens AMD's Chip-Making License

Intel is threatening to terminate a cross-licensing deal with Advanced Micro Devices, claiming its chief rival has breached the patent agreement by extending its rights to GlobalFoundries, AMD's newly formed joint manufacturing company.

In a March 11 filing with the Securities and Exchange Commission, AMD said Intel has threatened to terminate the 2001 agreement within 60 days if the dispute isn't settled. AMD denies it has done anything wrong.

The company's cross-license agreement covers thousands of patents related to the x86 microarchitecture that forms the foundation of microprocessors powering today's PCs. Without such an agreement in place, AMD's chip-manufacturing spin-off, GlobalFoundries, wouldn't be able to make x86 processors for AMD or anyone else, an Intel spokesman said.

"Any product AMD built without this license agreement in place could conceivably infringe" on Intel patents, the spokesman told InformationWeek. The agreement covers 12,500 Intel patents. He didn't know how many AMD patents were covered.

At the heart of the dispute is whether GlobalFoundries is a separate company versus a subsidiary of AMD. GlobalFoundries is a joint venture between AMD and Advanced Technology Investment Co., formed by the Abu Dhabi government.

As an AMD subsidiary, GlobalFoundries would have a right to Intel's patents. However, Intel maintains that AMD can't call the company a subsidiary because AMD only owns 34.2% of GlobalFoundries with ATIC controlling the rest. As a result, the new company has to cut its own deal with Intel, which has never said it wouldn't license its technology.

"If GlobalFoundries wants a license, then they should talk to us, and so should AMD," the Intel spokesman said.

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