Because of the details of a lengthy 1995 legal settlement between Intel and AMD, Intel can in all probability create and sell chips that are completely compatible with AMD's Opteron and Athlon 64 chips, which can run both 32- and 64-bit software, according to the companies and legal experts. Intel won't even have to pay AMD royalties if it incorporates ideas from any AMD patents into its chips.
"My understanding, based on the licensing agreement, is that Intel has access to AMD's patents so patent protection should not be a problem," said Richard Belgard, a noted patent consultant.
Intel may have to rename some of the instructions, or commands, embedded in any chip that is similar to Opteron, but "the code can be 100 percent compatible," Belgard added.
Though Intel spokesman Chuck Mulloy declined to comment on whether or not Intel is working on a 32/64 bit chip, he concurred with Belgard.
"There are no legal barriers" that would prevent Intel from coming out with a chip that is similar and compatible with Opteron, he said. "There are no pitfalls either way."
An AMD representative stated: "I believe that is the case," but added that it would all depend on the circumstances.
Market waves
The settlement terms could have a significant impact on how the market for 32/64-bit chips such as Opteron develops. Opteron and Athlon 64 can run both 32-bit software, which is found on most desktop today, and 64-bit software, reserved typically for computers running databases and complex applications. Thus, these chips can be used in a wide variety of computers. Intel's Xeon and Pentium chips only run 32-bit software.
For one thing, software developers will not have to write two different versions of their applications -- one for AMD's chip and one for a hypothetical Intel chip -- to satisfy the market.
Microsoft will also have to write one version of Windows XP and Windows Server 2003 for computers with 32/64-bit chips. Microsoft, in fact, only plans to come out with one core version of Windows XP and Windows Server 2003 for the respective markets that each OS addresses, according to sources. Windows XP for 32/64-bit systems is slated for the second half of the year.
For AMD, the existence of a 32/64-bit Intel chip would deprive the company of a competitive advantage. But, by the same token, the company wouldn't have to worry about courting developers to write software for the 15 percent of the market that AMD commands. AMD also has more experience in this market, the AMD representative pointed out.
Intel's ability to produce such chips without incurring legal liability comes up because of an announcement Intel is expected to make next week at its Intel Developer Forum in San Francisco. The company is expected to demonstrate a Pentium class chip that can run 32-bit software, which is used on Windows desktops today, and 64-bit software, which is used on high-end servers to run databases and other complex applications. The code name for the enabling technology is Clackamas
IBM and Sun Microsystems have released computers using the chip, and Hewlett-Packard is already using Athlon 64 chips in desktops and will likely announce later this month that it will use Opteron in servers.
The 1995 settlement terms capped a contentious and lengthy series of legal battles between AMD and Intel. Intel developed the world's first microprocessor in 1971. It relied on the so-called x86 architecture, which has since served as the blueprint for the vast majority of microprocessors that Intel and AMD have made.
IBM adopted x86 chips for its first computers in 1982. As part of the IBM deal, Intel licensed the x86 architecture to AMD so that IBM could have a second source for chips. (Ironically, until Opteron came out, IBM only used AMD chips once and for a very brief period.)
The lawsuits started in 1987. Rich Lovgren, former assistant general counsel for AMD, recalled that AMD founder Jerry Sanders sat through "every second" of one of the trials. "There were certainly bridges that were burned," he said.
Under the terms of the settlement, both companies gained free access to each other's patents in a cross-licensing agreement. AMD agreed to pay Intel royalties for making chips based on the x86 architecture, said Mulloy, who worked for AMD when the settlement was drafted. Royalties, he added, only go one way. AMD does get to collect royalties from Intel for any patents Intel might adopt.
AMD also agreed not to make any clones of Intel chips, but nothing bars Intel from doing a clone of an AMD chip, Mulloy added.
While the terms may seem one-sided, AMD has benefited from the agreement as well. Without the clean and enforceable right to make x86 chips granted by the agreement, AMD would not have been able to produce the K6, K6 II, K6III, Athlon, Duron, Athlon 64 or Opteron chips without fear of incurring a lawsuit.
The deal also came at a time when AMD was facing difficult pressures. Soon after, the company, based in Sunnyvale, Calif., would also go on to report five successive annual financial losses.
But, Belgard said of the agreement: "AMD is in business because of it."
Talkback
Win-Win for Intel once more...! AMD made the breakthrough into 32/64 combined technology, Intel can simply copy it with no comeback...How can AMD ever win? They chose to go Itanium, but now they have seen the success of Opteron they want a piece of the pie! Doesn't it suck!?
How is AMD "winning" now? They are far from dominant in the market place but are in fact capturing more market share by producing inexpensive realtively high performance CPUs at a price that Intel can't, or is unwilling to, match. They have a front-side bus that eliminates most of the bus contention that the Itanic suffers from. And they are engendering a cult following.
While Intel is cross-licensed to use AMD's chip design, what about the support for the Alpha-based bus? Can Intel use that freely? I don't know the details of how that works but it seems like it will still take Intel time and money in manufacturing and engineering support to catch up in that area. In the mean time AMD steals a march while Intel catches up. This may not last. Intel may overwhelm AMD n the long run. But currently AMD is gaining ground.