Intel threatens AMD's x86 chip production

Following AMD’s announcement last year that it would spin off its chip manufacturing assets, Intel was quick to voice it had serious questions about the transaction, specifically in reference to a cross-licensing agreement that allows AMD to manufacture chips using Intel’s X86 design – but not to transfer these rights to a third party. Now that the transition has finalized and GlobalFoundries officially launched, it seems that the patent squabble between the two chip giants is escalating.

As it turns out Intel is threatening to terminate AMD’s rights to the patents in 60 days if the alleged breach is not corrected. According to them, GlobalFoundries is not a subsidiary under terms of the agreement and is therefore not licensed under the 2001 patent cross-license agreement. AMD on the other hand views this merely as a way for Intel to distract the public's attention from its recent antitrust battles with the European Commission and accused them of violating the agreement terms by threatening termination.

The cross-licensing agreement enables each company to use the chip technologies of the other to make a wide variety of products. However, a party that has been found to be in material breach of agreement would lose these rights while the other non-infringing part can still access all the information in question. In other words, we can probably expect a long and heated patent battle.