Intel Corp. accused Advanced Micro Devices Inc. of breaching the terms of a cross licensing agreement between the two rival chip makers, threatening the future of Globalfoundries, the joint venture recently set up by AMD to handle its manufacturing operation.
AMD created Globalfoundries in a joint venture with Advanced Technology Investment of Abu Dhabi and will control 34.2 percent of the foundry.
According to the U.S. Securities and Exchange Commission filing, Intel believes AMD has committed a material breach of the cross license, a charge that AMD denied on Monday saying that Intel has no right to terminate rights and licenses covered by the agreement.
Under the terms of the cross license, there is an escalating procedure for resolving disputes, and the company has commenced the application of that procedure with respect to Intel's purported attempt to terminate the company's rights and licenses under the cross license, AMD said in a statement.
Intel, in turn, released a statement saying AMD cannot unilaterally extend Intel's licensing rights to a third party without Intel's consent, according to Bruce Sewell, senior vice president and general counsel for Intel. We have attempted to address our concerns with AMD without success since October. We are willing to find a resolution but at the same time we have an obligation to our stockholders to protect the billions of dollars we've invested in intellectual property.
Intel is asking AMD to resolve the problem within 60 days, which may include renegotiating a new license.