AMD Gets Paid

I was really surprised by an AMD and Intel announcement today.

Intel Corp. is paying Silicon Valley rival Advanced Micro Devices Inc. $1.25 billion to squash a legal battle over Intel’s sales tactics, a rift that led to antitrust charges against Intel in several countries and was headed toward a costly and nasty trial next year.

Intel still has to face government charges from the EU and NY State but it AMD will stay out of those and not start any lawsuits of it’s own.

Update: TechCrunch says 1.25 billion is nothing to Intel.

Just to put the size of the settlement in context, last year Intel’s revenues were $38 billion. Last quarter alone, it was making roughly $104 million a day. At that rate, Intel brings in $1.25 billion every 12 days. It can absorb the settlement pretty easily.

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ArsTechnica On Intel Making Batteries

I love ArsTechnica, but I have to question part of an article that Jon Stokes wrote today about Intel making car batteries.

I bring this up because Intel doesn’t actually make as many chips over here as they used to. Most of the company’s sales are overseas (Asia is the biggest market), so that’s where a large and growing percentage of its workforce is, as well. The company’s pronounced shift in moving jobs abroad has been a sore spot for American Intel employees over the past decade, but I hear that, internally, the Intel top brass makes no bones about the fact that they have no qualms about moving the plants closer to the customers.

I am employed by Intel in the manufacturing side of their business. I don’t pretend that I know everything that is going on but I’m pretty sure this part of the article is incorrect. Most of Intel’s manufacturing is in the United States with the rest in Ireland and Israel. The only Asian capacity is in China and it hasn’t finished construction.

I also don’t know anything about Intel replacing manufacturing capacity in the US with factories outside of the US. My opinion: It costs billions of dollars to build a factory, Intel isn’t about to move capacity from existing locations to overseas unless there’s economic reasons to do so and highly skilled worker base. Just because the customers are there doesn’t seem like a good enough reason.

As far as Intel making batteries? I have to agree with the rest of the article. It’s better if Intel invest in battery tech R&D rather than try it themselves. Not that I wouldn’t love to see Intel broaden out in other ventures. Intel has failed at every attempt to make non microchip businesses (see LCOS and the watches they made that I can’t find a link to) as profitable as chips and top management knows that.