What an irony! AMD could potentially block Intel deal by invoking agreement put in place to prevent its own sale

Date:
Tue, 25 Feb 2025 18:32:00 +0000

Description:
If Broadcom or another buyer does want to acquire Intel, they will have to negotiate a new cross-license agreement with AMD.

FULL STORY ======================================================================Several big firms are interested in acquiring Intel, reports claim Suiters
potentially include TSMC and Broadcom, but AMD could block them A deal dating back 16 years will require any buyer of Intel to negotiate with AMD

Recent reports have claimed Taiwan Semiconductor Manufacturing Co. (TSMC) and Broadcom are separately considering deals to split Intel apart , with
Broadcom interested in the chip design and marketing side of the business and TSMC potentially interested in the chip factories. That story came on the heels of a report from eeNews Europe , which suggested an alternative
scenario in which Intel could merge with GlobalFoundries , a firm born out of AMDs manufacturing division that was spun off some years back when the then-struggling chipmaker decided to go fabless.

Theres no confirmation that Intel is going to be sold off to any of the potential suitors rumored to be sniffing around, but there are obstacles that any buyer will need to be aware of. One, of course, is that the US government isnt likely to be keen on allowing a foreign entity like TSMC to run Intels chip business. Another issue, which Digit to Dollars brought to light back in November 2024, could further complicate any deal. Broad cross-licensing agreements

We are frequently asked some version of Will someone acquire Intel?", the
site noted. "At this point, we think it is highly unlikely, but these are highly unpredictable times. Setting aside all the principal considerations like money, strategy, and regulatory approval there are a few other hurdles. Chief among those is Intels license for x86.

Apparently, when Intel and AMD resolved their multi-decade dispute over x86, the cross-license agreement held provisions about transferability. If either company is acquired, the other has the right to cancel the license, effectively blocking the deal. When this was signed, we have to think
everyone involved assumed it would be AMD getting acquired, but the provision seems to be mutual, and times change.

Change they do indeed. While AMD is performing well, Intel isnt. Hence all
the speculation surrounding its potential acquisition.

The broad cross-licensing agreements, which arent limited purely to the x86 instruction set architecture (ISA), mean Intel and AMD can use each others patents and will avoid accidental infringement lawsuits. There are strict rules over what they can do, so for example, Intel cant make chips for AMDs sockets and vice versa.

The cross-license agreement states that if either AMD or Intel merges with another firm or gets acquired, the deal ends and will require the remaining chipmaker to negotiate a new agreement with the new owner. If Broadcom were
to buy Intel, that could create an interesting scenario.

AMD could negotiate with Broadcom in a bid to better challenge Nvidia, but as Toms Hardware points out, At present, Broadcom, armed with both CPUs and AI processors, poses a greater competitive threat to AMD than Intel, the latter of which lacks a clear AI strategy. In terms of market capitalization, AMD currently ranks as the 83rd largest company in the world, while Intel sits at 165th. Broadcom, however, is far ahead in 11th place, which shows its
industry clout.

A licensing agreement between AMD and Broadcom would be in both companies interests, but what form that might take is anyones guess right now. You
might also like TSMC, Broadcom could tear apart Intel's legendary business after 57 years Rumor has it that Intel could merge with AMD's former foundry Intel slams Nvidia and AMD, claims chip giants have security flaws



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Link to news story: https://www.techradar.com/pro/what-an-irony-amd-could-potentially-block-intel- deal-by-invoking-agreement-put-in-place-to-prevent-sale-of-amd


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