Published in PC Hardware

If someone buys AMD, Intel CAN recall their bus license

by on22 May 2008


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Don’t you dare


We were pointed to some rather interesting legal documents that describe most of the details of the latest AMD – Intel bus cross-license agreement, where Intel allows AMD to use its bus technology.

It’s an awfully long document, but we will point out the highlights. The contract was signed in early May 2001 by Craig Barret and Hector Ruiz, at that time Chief Operating Officer himself.

The contract will expire on January 1, 2011 and AMD has agreed to renegotiate the contract one year before the expiry. You can easily say that these talks will take place in 2010.

The contract strongly suggests that no company can buy AMD or to be more precise, no company could buy more than 50 percent of AMD.

So let’s hypothesize for a second here. Let’s say Nvidia or IBM or any other of the rumored companies dares to buy AMD. By the current bus license agreement Intel could simply re-call the bus license, leaving the acquired portion of AMD worthless.

Intel could have some regulatory issues if they do something like that, but we all know that courts would take years to settle this kind of case and by that time anyone who would acquire AMD could easily go bankrupt.

The only option that AMD has at the moment is to sell some smaller parts of the fab and we are not sure that this would help the struggling chip maker. If they get things back together and make 45nm CPUs with decent clock speeds in late 2008, then we don’t think AMD will have to sell its fabs and selling them would just make AMD CPUs less price competitive compared to Intel; and this is the last thing that AMD can afford right now.

Last modified on 22 May 2008
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