FTC Wants Intel to Simplify x86, Chipset Licensing Terms

FTC Wishes More Competition in the High-Tech Market Segment

by Anton Shilov
12/22/2009 | 10:31 AM

The Federal Trade Commission has issued a list of requirements for Intel Corp. in case it wins the case about the chip giant in court. While the vast majority of remedies touch upon business processes, there are also proposals to simplify licensing of x86 instruction set as well as Intel-compatible chipsets. Some believe that this will generally let more companies to compete on the high-tech market, but is it really so?


The list of proposals by FTC contains several rather intriguing remedies that directly advice Intel how it should enable third parties to compete against itself in the light of the current and future market realities.

FTC Wants Competition on the Market of Chipsets

“Requiring Intel to make available technology (including whatever is necessary to interoperate with Intel’s CPUs or chipsets) to others, via licensing or other means, upon such terms and conditions as the Commission may order, including but not limited to extensions of terms of current licenses,” one of the proposed reliefs reads.

Potentially, if the court finds Intel guilty of violation of antitrust laws and uncompetitive behavior, the FTC may force Intel to extend the existing cross-license agreements with companies like Nvidia Corp., Silicon Integrated Systems Corp. or Via Technologies and allow those three chipset makers to make and sell core-logic sets compatible with Intel processors. At present, Nvidia and SiS can make chipsets compatible with Intel AGTL+ bus, whereas Via has rights to make x86-compatible processors, but cannot make those central processing units (CPUs)compatible with Intel’s chipsets or core-logic sets compatible with Intel processors or processor sockets.

Even if FTC enforces Intel to formally extend agreements and allow third-parties to make chipsets for Intel Atom, Intel Core i3/i5/i7 processors with integrated memory controllers, Nvidia, SiS and Via will hardly be able to offer anything valuable for Intel platforms: all future Intel processors have built-in memory controllers as well as graphics cores and only require I/O controllers and certain special-function chips. While formally there can be competition on the market of those simplistic chips, in reality such rivalry hardly brings anything to the PC market. Intel is targeting its Atom cores onto the market of smartphones, but there it will work with other companies and it is unlikely that traditional chipset vendors will follow Intel there.

A desperate way of encouraging competition on the market of chipsets for Intel CPUs would be to force Intel to open up specs of microprocessor busses and allow anyone to develop and sell appropriate core-logic sets. Not only this will cause chaos with compatibility and reliability on the market, but this completely contradicts to the current trend of platformization.

FTC Wants Liberalization of x86 License

Another thing proposed by FTC is simplification of x86 licensing agreements. Some have already expressed hopes that such liberalization will eventually let newcomers to produce x86 processors. Some even claim that Nvidia Corp., which has been hiring former Transmeta engineers for several quarters now, could become such an x86 newcomer.

“Prohibiting Intel from including or enforcing terms in its x86 licensing agreements that restrict the ability of licensees to change ownership, to obtain investments or financing, to outsource production of x86 microprocessors, or to otherwise partner with third parties to expand output,” one of the proposals reads.

Throughout the history, x86-related and some other cross-licensing agreements between Intel and other technology companies, such as Advanced Micro Devices, Cyrix Semiconductor or Centaur Technologies, were non-transferrable in case of acquisition of the original licensee and x86 chips should be made only on foundries that had cross-licensing or x86 license agreements with Intel. Part of the production could still be outsourced to third-parties.

What FTC is trying to enforce is something that we already see now: AMD makes its processors at Globalfoundries (a joint venture between AMD and Advanced Technology Investment Company, where AMD now has a relatively small stake) and can make it on other foundries as well (according to the latest agreement between AMD and Intel), whereas Via Technologies produces its x86 chips both at Fujitsu Semiconductor as well as at Taiwan Semiconductor Manufacturing Company. Looks like FTC is not quite satisfied with existing agreements, as yet another clause in its “wish list” proposes to limit Intel’s abilities to sue contract makers affiliated with Intel’s rivals.

“Prohibiting Intel from suing or threatening to sue its competitors’ third-party fabricators,” the proposal No. 23 claims. 

At present Nvidia and/or other companies who have money and desire to develop microprocessors do not have x86 license and can hardly offer Intel a lot of valuable patents in exchange for such license. However, if FTC manages to prove Intel’s illegal behavior and force the company to liberalize its x86 license so that to make it transferrable, then potential newcomers will be able to acquire smaller companies, e.g., Via Technologies in order to obtain rights on the x86 instruction set. There is a problem, though: even FTC is talking only about x86 itself, not cross-licensing agreements in general. Hence, the newcomers will likely not get various extensions, new instructions and application-specific accelerators. Needless to say that being not interested in new rivals on the x86 market, both Intel and AMD will start to aggressively implement new technologies into their processors to distance themselves from untraditional competitors, which will have hard times not only competing against both CPU companies, but also trying to ensure wide infrastructure support.

 Of course, this will make microprocessors better overall and the end-user will benefit from increased performance. But will such regulations bolster competition on the market of CPUs and enable newcomers to start making x86 chips? Looks like no.