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Tech Check
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I've been covering the Silicon Valley since 1989, and among the first stories I ever sunk my teeth into was the vaunted Advanced Micro Devices [AMD
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] versus Intel [INTC
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] saga. Ruled by intrigue, corporate malfeasance, arrogance, nastiness and name-calling, the rivalry between the two has always been good copy.
It used to be a personality driven clash: the equally pugnacious CEOs in W. Jerry Sanders III who once referred to Intel's control of the microprocessor market using the same means as "jack-booted thugs" to get its way; and Andy "only the paranoid survive" Grove who never missed a chance to thork his far tinier rival in the media.
Between the US Justice Department and AMD, the anti-trust allegations against Intel have been lobbed regularly, and while there's been some notable losses, most notably the consent decree Intel had to sign after coming up short in its federal trial, by and large the company's microprocessor monopoly has operated largely unfettered. Sure there's the occasional collateral damage: bad press here, a fine there, but AMD, and the feds for that matter, have been unable to land that knock-out punch.
Which leads me to governments overseas. There's the European Union, sniffing around for some anti-trust action; and the case in South Korea where authorities seem to have uncovered some pretty questionable behavior by the world's largest chip maker.
But it all goes back to Intel's rivalry with AMD. AMD makes charges, and Intel used to laugh them off. Intel makes charges against AMD and the industry laughs them off. You see, Intel is forced to answer every allegation and every misstep by AMD because it gives the illusion that AMD is somehow a competitive threat.
Even though AMD's financial back has been thrown up against the wall so many times that its executive staff is probably suffering from scoliosis. But Intel must paint AMD, less than a tenth Intel's size, as a competitor.
Most recently, Intel claims that AMD is operating outside the bounds of its agreement on how to compete with Intel. And Intel's claims generated a fair amount of chuckling since AMD's competitive attempts have been hollow at best. But that didn't stop AMD from issuing the following in an 8-K SEC filing today:
"Intel’s action is an attempt to distract the world from the global antitrust scrutiny it faces. Should this matter proceed to litigation, we will prove not only that Intel is wrong, but also that Intel fabricated this claim to interfere with our commercial relationships and thus has violated the cross-license."
AMD has also tried to come up with the true value of Intel's deceitful, predatory practices in the marketplace and claimed that consumers had been overcharged something on the order of $1,000,000,000,000,000 over the past few decades. That's a trillion dollars!
That'd be a nifty argument if Moore's Law hadn't been juicing innovation all these years, or the idea that a microprocessor's power doubles every 18 months while its costs drop by half. Also, a nifty argument if Intel wasn't pumping billions of dollars into research and development annually.
AMD can complain all it wants, but it's had the better part of 30 years to convince the world of the illegal behavior Intel allegedly employs to maintain its control of the chip business. I have no doubt that Intel pushes the boundaries of what's legal, and it might even break those rules every now and then. And when it does, it should pay the price. As it has done in the past. And likely will again if some of the details of its behavior in Korea turn out to be true.
In the meantime, AMD should save its bluster and focus on the clean room, not the court room, and stop relying on judges to do what its engineering and sales staff apparently can't.
This war of words isn't going away any time soon. And thank goodness. It's been entertaining for decades, and likely will be for years to come. But investors in both companies see right through it.
Questions? Comments?
Data is a real-time snapshot *Data is delayed at least 15 minutes