AMD Files $2-Billion Suit Against Intel : Technology: Advanced Micro Devices accuses the microprocessor giant of trying to corner the market on computer chips.


Opening a new front in a long-running legal war, Advanced Micro Devices on Thursday filed a $2-billion antitrust suit alleging that Intel has undertaken a long series of illegal actions to monopolize the market for personal computer microprocessors.

The suit could fuel suspicions among some in the personal computer business that Intel is taking unfair advantage of its virtual monopoly on the microprocessor chips that form the brain inside many International Business Machines-compatible personal computers. Those chips, known as the 386 and 486, have often been in short supply, and the Federal Trade Commission is investigating Intel’s business practices.

But Intel Chief Executive Andrew S. Grove ridiculed the suit.

“What we have here is the Milli Vanilli of semiconductors,” Grove said in a statement, referring to the singing duo that was found to have lip-synched its Grammy Award-winning songs. “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.”


Intel and AMD have for years been engaged in a convoluted legal battle over the rights to the 386 and 486, which AMD maintains it is entitled to produce under a 1984 technology sharing agreement between the two companies. An arbitrator last year found that Intel had acted in bad faith in reneging on that contract, though he also ruled that AMD had failed to uphold its side of the bargain.

Earlier this year, AMD introduced a “clone” of the 386 in the face of legal challenges from Intel.

AMD alleges in the lawsuit filed Thursday that Intel has intimidated computer makers out of buying the AMD 386 by threatening to withhold 486 chips.

AMD also alleges similar illegal “tying” practices in the case of earlier-generation 286 chips.

In response to past complaints about its allocation practices, Intel has said that it takes great pains to assure fairness and has implemented a program specifically to prevent any possible antitrust violations. But many in the PC business remain uncomfortable with Intel’s powerful position.

The AMD lawsuit asks for $2 billion in treble damages and injunctive relief requiring Intel to cease its allegedly unlawful practices and license the 386 and 486 to AMD.