The highlights of this year on the positive side for Intel are that they have the fastest CPUs on the market with the Nehalem based i5/i7 processors, their Core 2 series is still running strong in both desktops and notebooks, and Atom is helping to cement their product line in thin and lights. In the past year though, AMD has become more competitive with their 45 nm Phenom II and Athlon II products, Intel has slowly regained marketshare over its arch-nemesis by providing superior performing parts at competitive prices. The company keeps their revenue positive, even though the global economy is only now seemingly recovering from the disaster of the past 12 months.
While AMD’s “Breakfree” site has not been updated since Intel’s settlement with AMD went into effect, it will be interesting to see if AMD will continue to cover Intel’s current brush with the FTC.
There were just as many negatives this year though. The EU fined Intel a whopping $1.45 billion for anti-competitive practices this Spring. While Intel is appealing this fine, they still had to fork over the scratch to cover the fine. AMD was able to release a whole slew of emails from partners of Intel that do not show the company in a very positive light, and really highlighted the potential illegality of Intel’s rebate and co-branding programs. While the AMD trial was supposed to start next year, Intel negotiated a settlement with AMD. AMD would recieve $1.25 billion directly from Intel and a 5 year extension on the x86 license plus further cross-licensing deals. Any further issues between the two would go to mediation, and Intel has dropped its countersuit against AMD, which has allowed AMD to fully spin off GLOBALFOUNDRIES. AMD would then agree to drop its suit against Intel, and not participate in any other legal actions that may or may not be placed upon Intel. Furthermore, on the product side, Intel has recently cancelled its Larrabee product for the time being. While work is still being done on graphics, we likely will not see the fruits of several years and billions of dollars of development for this particular architecture. While Intel obviously has learned a lot here, it will not be until 2011 at the earliest before we see another high end graphics attempt by Intel. Adding insult to injury, NVIDIA has also leveled charges against Intel that it has used unfair business practices to stifle competition from “Little Green”, especially in terms of chipsets for current high end Intel CPUs.
Intel has faced similar suits in Korea and Japan, and have paid fines in those cases. The FTC is sorta the big daddy of them all in these cases. Plus since Intel originated and is headquartered in the US, this suit could have a significant monetary and regulatory impact on Intel’s operations. Intel also still faces charges from New York’s Attorney General about its anti-competitive practices. That particular venue will be exceptionally tough on Intel, as GLOBALFOUNDRIES is investing billions into building up to three mega-fabs in the Luther Forest region of New York.
So far Intel has not responded to this action by the FTC, but we can expect a statement later today. Things do not look good for Intel, but certainly the company will not be broken up like Standard Oil or Mountain Bell. Intel will survive, and they will continue to be a driving force in the semiconductor industry, but they will continue to be under intense scrutiny over their business practices. The ball that started rolling in Japan and Korea earlier this decade, further snowballed into AMD taking Intel to court, and then gained significant momentum when the EU found Intel guilty of anti-competitive practices. The FTC really does appear to be behind the curve in their actions, but these types of charges are not thrown around willy-nilly. While it appears that the final verdict will likely find Intel guilty, the question foremost in all of our minds would be the penalties that Intel will face. While I am a fan of more or less free market philosophies, oversight and regulation in these matters do benefit consumers far more than free market pressures. Because the cost of getting into the processor market is so incredibly high, there would be no significant competition for Intel if they were to bury AMD. And that would be very bad for us all.
- Intel Fined $1.45 Billion by EU for Antitrust Violations
- NVIDIA claims Intel Atom pricing unfair for ION
- EC Ruling: Statement by Intel President and CEO Paul Otellini
- NVIDIA CEO Rants on Intel Once Again
- European Commission Charges Intel with Antitrust Violations