AMD sues Alcatel over Flash cash

Claims French co. reneged on 'hugely beneficial' supply deal

By Tony Smith • Get more from this author

Posted in Business, 4th April 2001 09:49 GMT

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AMD is suing French telecoms equipment company Alcatel for not buying as many Flash memory chips as it promised it would.

Quite apart from the financial impact of Alcatel's alleged decision to back out of the deal, AMD is rather sensitive on the matter of Flash sales. Relative Flash chip sales is yet another yardstick AMD and Intel use to compare the size of each others' willies.

The Alcatel contract, a two-year supply agreement, was signed last year, but clearly the French company has since decided that - thanks to the economic slowdown, presumably - it simply doesn't need as many Flash memory chips for networking equipment and modems as it originally thought it would.

AMD wants it to pay up in any case. According to the chip maker, the two firms have been talking for "several months" to resolve the dispute. The negotiations weren't successful, leaving AMD "reluctantly... filing a lawsuit as a last recourse".

AMD points out that the original contract was "hugely beneficial" to Alcatel, but clearly it wasn't hugely bad for AMD, or it would be glad to see the back of it.

Alcatel has yet to respond to the suit. ®

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