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Intel shakes AMD's chip-fabbing baby

Cross-licensing custody battle

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AMD's plans to spin its debt-dependent chip manufacturing biz into a separate entity may free the chipmaker from a considerable financial burden, but old rivalries with Intel will assure things don't go down without a hitch.

AMD intends to own 44.4 per cent of a new chip fabbing company, tentatively called The Foundry Company, while Abu Dhabi's Advance Technology Investment Company (ATIC) will own the rest. Both AMD and ATIC will have equal voting rights.

Shortly after AMD announced the deal, Intel shot back voicing "serious questions" about how it will affect an existing cross-licensing agreement between the two companies.

Penned in 2001, the agreement lets AMD use various Intel licenses and patents. (Only a heavily redacted copy of the agreement is available to the public so its exact nature is unknown). The pact also restricts AMD from transferring any of Intel's technologies to a third-party.

Intel believes AMD's joint-venture may violate the agreement.

"Intel has serious questions about this transaction as it relates to the license and will vigorously protect Intel's intellectual property rights," Intel spokesman Chuck Mulloy told Reuters.

AMD meanwhile claims its lawyers have already pored over the transaction and say it won't violate any agreements with Intel.

What the two companies' latest sparring match could mean for AMD's big plans won't be clear until Intel moves past the "questions" phase.

Proof again that old grudges die hard. But old cross-licensing agreements are nearly indestructible. ®

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