Intel Corp. and Advanced Micro Devices on Thursday announced a comprehensive agreement to end all outstanding legal disputes between the companies, including antitrust litigation and patent cross-license disputes.

Under terms of the agreement, AMD and Intel obtain patent rights from a new 5-year cross license agreement, Intel and AMD will give up any claims of breach from the previous license agreement, and Intel will pay AMD $1.25 billion. Intel has also agreed to abide by a set of business practice provisions.

As a result, AMD will drop all pending litigation including the case in U.S. District Court in Delaware and two cases pending in Japan. AMD will also withdraw all of its regulatory complaints worldwide. The agreement will be made public in filings with the Securities and Exchange Commission.

Moreover, from now on, AMD will be able to manufacture its x86 microprocessors on any factory and those production facilities do not have to be qualified as AMD’s subsidiaries. As a result, when Globalfoundries, at present a joint venture between AMD and Advanced Technology Investment Company, absorbs recently acquired Chartered Semiconductor Manufacturing and AMD will become a minor shareholder, the contract maker of chips will be able to manufacture x86 processors. Intel, on the other hand, now has access to patents of ATI, graphics business unit of AMD.

"While the relationship between the two companies has been difficult in the past, this agreement ends the legal disputes and enables the companies to focus all of our efforts on product innovation and development," the two companies commented in a joint statement.

Tags: AMD, Intel