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Intel payout drives AMD profit

Written by James Delahunty (Google+) @ 22 Jan 2010 9:55 User comments (8)

Intel payout drives AMD profit Thanks to a $1.25 billion settlement between Intel and Advanced Micro Devices (AMD) in an antitrust battle, AMD has posted its first quarterly profit in three years. AMD did benefit from a lift in the computer market, with microprocessor and graphics chip unit sales increasing, although prices have fallen too. Revenue was up 42 percent over the same period of last year, totaling $1.6 billion (just ahead of the $1.5 billion analysts expected).
AMD admits that it would have last money if it wasn't for the Intel settlement. For 2009, AMD's net income was $304 million with revenue at $5.4 billion, compared to 2008 when AMD made a net loss of $3.1 billion with revenue of $5.8 billion. Intel reported last week its highest gross profit margin in the company's history with better sales in all of its major product categories.

The $1.25 billion settlement it paid to AMD brought an antitrust suit due to go to trial in March to an early end. AMD originally filed the lawsuit against Intel in 2005. The deal does not bring to an end other cases against Intel that AMD has been vocally supportive of. It has complained to antitrust regulators around the world about Intel's sales tactics, which it alleges are illegal.

The European Union has fined Intel a record $1.45 billion and Intel was also hit by an antitrust lawsuit brought by the U.S. Federal Trade Commission. There are also separate cases in New York and South Korea. Intel denies the allegations of wrong-doing in all of the above cases and is fighting off each.

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8 user comments

122.1.2010 10:43

So, let me get this straight: Intel's screw-up is to AMD's benefit, but AMD cannot make it w/o AMD's help? Very interesting . . . - BLUEBOY

222.1.2010 11:25

Originally posted by blueboy09:
So, let me get this straight: Intel's screw-up is to AMD's benefit, but AMD cannot make it w/o AMD's help? Very interesting . . . - BLUEBOY
EDIT - Sorry, but i meant that AMD cannot make it without Intel's help.

322.1.2010 12:05

Just because Intel makes a better product shouldn't mean having to pay it's deserved profits to a losing competitor.

It's like fighting in a wrestling match, winning and being forced to give your opponent partial credit.

Also, Intel and AMD aren't the only makers of CPU's....There's also VIA.

422.1.2010 12:54

they dont have to pay because they have a "superior" product. its because they were forcing companies and also offering substantial bonus for pc manufacturers to exclusively use their products. to the point that neither companies were profiting from it being intel was paying more to companies that used their processors then what they made out of the deal only doing so to strongarm amd out of business being amd couldnt counter offer because intels deals were so inflated from these bonus incentive neither company was actually making money only intel was gaining marketshare which hurts amd investment opportunities and couldnt compete do to unfair practice. Hence the the keyword "antitrust". if intel was clean they would have went to court its not like they couldnt afford the lawyers. they paid out cause they were in the wrong. saying intel makes a better product cause more people buy systems with intel chips in it is like saying windows is superior cause everyone buys systems with it installed. when there is no other option because said companies paid for it to be there.

This message has been edited since its posting. Latest edit was made on 22 Jan 2010 @ 12:54

522.1.2010 15:53

So whats the architecture cpu/mobo wise to watch over the next 2-3 year time span?

622.1.2010 20:23

We're gonna get out of this recession yet and Intel's gonna pay for it! Woohoo!

722.1.2010 23:18

It is no wonder intel has high profit margins when they sell $1000 desktop processors...AMD needs a new fab and a new chip design or Intel will continue to charge insane prices for these chips...and I am not sure AMD has enough cash left to do this.

828.1.2010 14:24

Originally posted by ZippyDSM:
So whats the architecture cpu/mobo wise to watch over the next 2-3 year time span?
KillerBug is right, Intel's the one to watch for a while. 1156 is a far better mainstream and realistic chipset, but Intel's going to try to push the more expensive 1366 by continuing to hamper 1156. More relevant, especially for non multi-SLI/Xfire setups is USB 3.0.

The plain fact is AMD lead innovation and architecture for a while, but is way behind now, with no catching up in the foreseeable future. Especially after the lynnfield release, and the new ATI chips just barely pulling ahead of NVidia. Sadly it seesm that AMD didn't take the single biggest thing they needed from ATI, better manufacturing processes.

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