Intel rattles cage over AMD's Foundry deal

23.01.2009
Intel has asked for a meeting with Advanced Micro Devices to discuss how its formation of The Foundry Co. may affect long-standing cross-licensing agreements between the two companies, AMD said in a regulatory filing Thursday.

AMD said the questions raised by Intel won't affect the formation of the new company, and one analyst said Intel may simply be maneuvering for a better negotiating position.

While they compete fiercely in the chip market, Intel and AMD also have licensing agreements related to x86 processors that allow them to use certain technologies without fear of being sued by each other.

The agreements apply to AMD and its subsidiaries, and Intel wants to meet with AMD to discuss whether The Foundry Co. will qualify as a subsidiary under the cross-licenses, according to .

AMD is splitting itself into two companies by spinning off its debt-laden manufacturing business. AMD will continue to design and sell its chips, while The Foundry Co. will manufacture them. It will be majority-owned by an Abu Dhabi investment firm, and AMD will hold 34 percent.

AMD called Intel's letter "another attempt by our competitor to cause uncertainty" as it gets close to closing the Foundry deal, which is expected next month if shareholders approve it at a Feb. 16 meeting.