AMD vs. Intel: The Battle of the Chip Makers

As many of you might already know, AMD (Advanced Micro Devices) has filed an AntiTrust suit against Intel. The suit was filed on Monday in the U.S. District Court in Delaware, details alleged scare tactics and coercion that AMD claims Intel imposed on 38 companies, including large-scale computer makers, small system builders, wholesale distributors and retailers. Intel processors account for more than 80 percent of the computers running x86-based chips, according to IDC. Those chips run many families of operating systems, including Microsoft Windows, Solaris and Linux. In that investigation, the agency said that Intel's Japan unit stifled competition by offering rebates to five Japanese PC makers--Fujitsu, Hitachi, NEC, Sony and Toshiba--which agreed not to buy or to limit their purchases of chips made by AMD and Transmeta. "You don't have to take our word for it when it comes to Intel's abuses; the Japanese government condemned Intel for its exclusionary and illegal misconduct," Thomas McCoy, AMD's executive vice president of legal affairs and chief administrative officer, said in a statement.

Intel then said they will respond to AMD's suit in court. "We strongly disagree with AMD's complaints about the business practices of Intel and Intel's customers," the statement said. Some people think it is a clue to AMD's market standing: "Rightly or wrongly, AMD's move can be seen as a clever move to take advantage of a recent favorable ruling in Japan. However, the timing of the complaint and the company's tone of indignation (perhaps exasperation) give us a sense that AMD's traction in processors that they enjoyed last year is not meeting expectations," Hans Mosesmann, an analyst at investment firm Moors & Cabot, wrote in a research report Tuesday. "It strikes us that AMD's approach is based on throwing everything but the kitchen sink at Intel in the hopes of getting something to stick," Mosesmann wrote. Amoung the suit was a 48-page complaint. “Everywhere in the world, customers deserve freedom of choice and the benefits of innovation -- and these are being stolen away in the microprocessor market,” said Hector Ruiz, AMD chairman of the board, president and chief executive officer. “Whether through higher prices from monopoly profits, fewer choices in the marketplace or barriers to innovation – people from Osaka to Frankfurt to Chicago pay the price in cash every day for Intel’s monopoly abuses.”

Yesterday, Intel CEO Paul Otellini defended his company: "Intel has always respected the laws of the countries in which we operate," Otellini said in a statement. "We compete aggressively and fairly to deliver the best value to consumers. This will not change." "Over the years, Intel has been involved in other antitrust suits and faced similar issues," Otellini said. "Every one of those matters has been resolved to our satisfaction. We unequivocally disagree with AMD's claims and firmly believe this latest suit will be resolved favorably, like the others."

AMD too fought back by releasing an ad in many major newspapers. AMD's ad alleges Intel has harmed and curtailed competition in the chip industry, citing such issues as Intel strong-arming major customers to accept exclusive deals and threatening retaliation should they do business with AMD."For most competitive situations, this is just business. But from a monopolist, this is illegal," AMD claims in its ad. AMD has been calling action against Intel saying it "hurts consumers everyday". Sources: News.com