Intel, AMD set for SC showdown

Daniel Sorid

SAN FRANCISCO: The bitter rivalry between the two biggest makers of computer microprocessors is set to reach the U.S. Supreme Court, in a case that could determine the fate of a European antitrust probe.

Analysts say the case is unlikely to have an immediate impact on the profits of either Intel Corp., the world's largest chip maker, or Advanced Micro Devices Inc., its much smaller competitor.

Still, a ruling in favor of AMD could add new evidence to a European Commission investigation into complaints that Intel threatened retaliation against computer makers that use AMD chips, experts said.

The dispute hinges on a 40-year-old law that allows U.S. courts to make documents available to foreign tribunals. AMD has requested access to about 600,000 pages of Intel documents produced during a separate lawsuit so that it can turn over new evidence to European regulators.

"We want to make sure the EC investigators have the facts that should be made available to them," said Michael Simonoff, an AMD spokesman.

Intel, which is appealing a lower court's ruling that the statute allows AMD to get the documents, insists that the commission is investigating a complaint, not presiding over a lawsuit, and thus not subject to the U.S. law in question.

"They're seeking to get access to documents that are under court-ordered seal in discovery for litigation that doesn't exist," said Intel spokesman Chuck Mulloy.

The European Commission has had an open investigation into Intel's business practices for over three years, but has not taken any enforcement actions. The probe was touched off by complaints from AMD in October 2000 that Intel used the threat of retribution to prevent PC makers from using AMD products.

AMD attorneys had sought documents produced in a private antitrust suit against Intel by Intergraph Corp. that it believes contain evidence that could be useful to the commission.

In a twist, the European Commission has filed a brief in the case, but supporting Intel's position.

An attorney for AMD, Pat Lynch, said Commission staff members have told the company that they would be interested in the Intel documents, but are concerned about possible repercussions in future cases of U.S. courts ordering companies to produce documents.

Intel, which also faces a probe by Japanese antitrust authorities, has strongly denied allegations against it but is cooperating with the investigations.

Investors appear less focused on the court case than on the earnings outlook for both chipmakers, specifically corporate technology spending gains and productivity improvements from new chip-building technology, said Eric Gomberg, a chips analyst with Thomas Weisel Partners.

"I wouldn't say it's one of the areas where we've got a significant investor interest," Gomberg said.

For AMD, however, the case represents a chance to publicize its long-running complaint that Intel's tight grip on the market for microprocessors, the primary chip in a computer, has discouraged computer makers from choosing AMD chips.

"We have lots of indications from the marketplace that Intel takes steps to penalize anyone who promotes AMD products," Lynch, of the law firm O'Melveny & Myers LLP, said. "We would expect to find documents that find that."






© Reuters