Intel Agrees to Pay $1.25 Billion to AMD

Summary: After more than four years of court battle, Intel Corp has finally agreed to pay AMD more than $1.25 billion for allegedly violating product patents and anomalous business practices.

After the announcement, AMD stocks rose by more than 22 percent while Intel stocks dropped to $19.68 or 19 cent decrease.

The world’s biggest chipmaker Intel Corp. on Wednesday said that it has agrees to pay around $1.25 billion to Advance Micro Devices Inc. (AMD) over alleged antitrust litigation and patent disputes.

In a statement, Intel also said that they have agreed with their biggest competitor to have a new five-year cross-license deal as well as giving up breach claims to its previous contract. The chipmaker has also agreed to follow set business practice provisions stated in the settlement, which will end the four year case.

Upon the announcement by Intel, AMD stock rose instantly by more than 22 percent.It will be recalled that AMD filed a lawsuit against Intel in 2005 for allegedly blocking their products from the microprocessor market by giving huge discounts to customers in exchange for not buying the former’s chips.

It was not the first time that the two microchip giants have battled in court. It will also be recalled that in 1990s, Intel was subjected to antitrust investigations over licenses. Intel has also been a frequent visitor to the regulatory office due to its business practices. To date, the company controls some 80 percent of the microprocessor market.

With the news reaching the town, AMD’s stock rose from $1.16 to $6.48 at the New York Stock Exchange, which is also the biggest gain for the company in more than a year.Meanwhile, Intel stocks dropped to $19.68 or a 16 cents loss in Nasdaq Stock market.