AMD earlier this week announced plans to split into separate design and manufacturing companies. As part of the split, AMD will retain 44.4 percent ownership in the spinoff of its manufacturing plant - temporarily called The Foundry - with the Abu Dhabi government-formed Advanced Technology Investment Company owning the rest.
Just hours after the announcement was made, Intel said it was investigating whether or not the new company violates a chip licensing agreement it has with AMD. Under terms of the original agreement, AMD has been allowed to use Intel's x86 chip instruction set in exchange for paying Intel a royalty. According to AMD, nothing has changed that would invalidate the cross-licensing.
"We are completely confident the structure of this transaction takes into account our cross-license agreements," Phil Hughes, and AMD spokesman, wrote in an email. "Rest assured - we plan to continue respecting Intel's intellectual property rights, just as we expect them to respect ours."
Not all financial experts agree with AMD's assessment. Hans Mosesmann, a financial analyst with Raymond James, believes AMD probably is violating the cross-license agreement, but doesn't necessarily believe Intel would turn it into a legal matter. Instead, Mosesmann writes that Intel may choose to use it as leverage to "entice AMD to drop the anti-trust suits against Intel in return for this altruistic gesture."