Does AMD have a case?
Published: 29 Jun 2005 14:15 BST
Coercion or circumstance — that's the big question in the antitrust case filed by AMD against Intel.
The suit, filed late on Monday, provides a fairly detailed and lengthy laundry list of alleged misdeeds by Intel. The complaint alleges that in 2002, for instance, Intel agreed to pay NEC more than ¥300m (£1.5m) per quarter in exchange for caps on purchasing from AMD. AMD's share of NEC's consumer business went from 84 percent to virtually zero in six months, the complaint says. It also states that NEC constrained sales efforts around Opteron-based servers.
HP even turned down free microprocessors from AMD in 2002, while Intel pressured HP senior managers to fire an executive who developed a plan to use AMD chips in HP's Evo brand computers, the complaint states.
"There is no reason, other than Intel's chokehold on the OEMs, for AMD's inability to exploit its products in important sectors, particularly commercial desktops," paragraph 58 of the complaint states.
AMD, though, is also likely to have to counter assertions that its success or failure comes as a result of demand, product delays or customer inertia. Simply put, larger chipmakers typically can produce products for less money than smaller ones, and price and familiarity often trump technology.
"The question is, 'can AMD find the smoking gun?'" said Kevin Krewell, editor in chief of Microprocessor Report. "There is some circumstantial evidence that something is not right."
The complaint, for example, alleges that in late 2000, then-Compaq CEO Michael Capellas stopped buying AMD desktop processors because Intel "had a gun to his head".
AMD further alleges that it was negotiating with IBM on a commercial PC business partnership, which ended after Intel offered IBM "millions" in market development funds.
But in late 2000, the PC market was in a free fall. Jerry Sanders, then-CEO of AMD, said at the time that the company's goal of getting IBM, HP or Compaq to adopt an AMD chip for a business PC that year was being pushed out because of sluggish demand.
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