Chip maker Intel has agreed to pay its rival Advanced Micro Devices (AMD) $1.25 billion to settle a series of worldwide competition and patent disputes between the two companies.
The agreement comes as Intel, the world's biggest maker of semiconductors, faces increasing legal action around the world linked to its dominant position in the sector.
The companies said in a joint statement that the settlement represents 'a comprehensive agreement to end all outstanding legal disputes between the companies, including anti-trust litigation and patent cross licence disputes'.
AMD and Intel agreed to patent rights from a new five-year cross-licence agreement, and to give up any claims of breach of contract. In addition to the payment of $1.25 billion, Intel has also agreed to abide by a set of business practice provisions.
AMD will drop all pending litigation - including the case in US District Court in Delaware and two cases pending in Japan - and will withdraw all of its regulatory complaints worldwide, the statement said.
The news comes just a week after the attorney general of New York state filed a competition lawsuit against Intel alleging the chip giant engaged in illegal practices to dominate the market. It accused the company of 'exacting exclusive or near-exclusive agreements from large computer makers in exchange for payments totalling billions of dollars' and threatening retaliation against firms that did not fall in line.
The suit is the latest legal challenge for Intel, which is already being investigated by the US Federal Trade Commission. EU regulators fined Intel a record €1 billion in May, claiming the company abused its stranglehold on the semiconductor market to crush AMD. Intel denied the charges and has appealed the EU ruling.
