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AMD Files $2 Billion Suit Against Intel Over Computer Chips

August 29, 1991

SAN JOSE, Calif. (AP) _ Advanced Micro Devices Inc. on Thursday filed a $2 billion antitrust lawsuit against Intel Corp., claiming the rival computer chip maker manipulated the industry to maintain a monopoly on key technologies.

But Intel, which has long dominated microprocessor sales, called the lawsuit an attempt by a lesser company to shift the focus from competition to the courts.

″What we have here is the Milli Vanilli of semiconductors,″ said Andrew Grove, Intel’s president and chief executive officer, referring to a once- popular singing group that was caught lipsyncing to other vocalists’ voices.

″Their last original idea was to copy Intel. Since they can’t win in the marketplace, they try to defeat us in the courts and press.″

Besides seeking $2 billion in damages, the lawsuit, filed in U.S. District Court in San Jose, requests an injunction to prevent Intel from continuing the alleged antitrust activity.

Santa Clara-based Intel, which makes the most popular microprocessor ″brains″ of computers, also is under investigation by the Federal Trade Commission for alleged anticompetitive activities.

Intel’s stock fell 50 cents a share Thursday to $51.25 in New York Stock Exchange trading.

John Greenagel, spokesman for Sunnyvale-based AMD, said Intel agreed to share computer chip technology with AMD in the early 1980s, but then balked - something Intel has denied in ongoing disputes between the two companies.

″After achieving success in the market, Intel made a secret decision in 1984 to string us along,″ Greenagel said. ″They didn’t allow AMD to obtain access to future generations of the microprocessors.″

Intel became the No. 1 microprocessor maker thanks to its agreement with International Business Machines Corp., which has used the chips in its personal computers since IBM unveiled its first PC in 1981. Intel’s so-called X86 line of microprocessors has been the most popular, including the 286, 386 and 486 chips.

AMD accuses Intel of keeping a tight grip on microprocessor supplies and giving preferential treatment to larger, favored customers.

The lawsuit also accuses Intel executives of threatening to withhold microprocessors from companies that do business with AMD.

AMD broke Intel’s five-year monopoly on the 386 chip this year by introducing a clone, and Intel quickly sued in federal court, claiming patent infringement on a math coprocessor device on the silicon brain.

But in that lawsuit - and in a separate action brought by AMD against Intel four years ago - AMD contends that technology-sharing pacts it signed with Intel in 1976 and 1982 allow AMD to use similar chip designs.

Computer industry executives have long griped about Intel’s influence over the industry because the 386 microprocessor is often in short supply, and Intel is forced to ration the chips.

Intel invented the microprocessor and Grove has defended his company’s drive to protect its technology against imitators such as AMD.

″If other people want to compete with us they have to compete on their own merits and not (by) siphoning off our invention and knowledge,″ he said in an interview earlier this year.

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