Intel Has “Serious Questions” Regarding AMD’s Fab Spin Off

Intel Questions Legitimacy of AMD’s Fab Spin Off

by Anton Shilov
10/07/2008 | 03:04 PM

FOLLOW UP: AMD Confident In Ability to Produce x86 Microprocessors Despite Intel’s Doubts.

Intel Corp. said on Tuesday that it had serious questions regarding AMD’s intention to spin off its fabs into a separate contract semiconductor manufacturing startup that is presently referred to as “The Foundry Company”. Advanced Micro Devices and Intel have cross-license agreement that regulates many aspects of technology licensing and manufacturing.

 

“Intel has serious questions about this transaction as it relates to the license and will vigorously protect Intel’s intellectual property rights,” said Chuck Mulloy, an Intel spokesperson, in an interview with Reuters news-agency.

AMD on Tuesday announced intention to spin off its manufacturing facilities into a separate company presently called the “Foundry Company”. Under the terms of the agreement with Advanced Technology Investment Company (ATIC) based in Abu Dhabi, United Arab Emirates, AMD will own 44.4% and ATIC will own 55.6% of The Foundry Company’s fully-converted common stock upon its formation.

The wide cross-licensing agreement between AMD and Intel, which is also believed to cover x86 instruction set, does not allow AMD to transfer any of Intel’s technologies to any third-party. As a result, if AMD itself is acquired, the new company will not have rights to produce x86 central processing units (CPUs) or utilize any technologies from Intel. While AMD can outsource part of its production, contract manufacturers can only legally produce 20% of AMD’s total output, according to some claims.

AMD did not comment on the news-story.