Intel Settles With NVIDIA: More Money, Fewer Problems, No x86by Ryan Smith on January 10, 2011 9:20 PM EST
Wrapping things up, as we mentioned in our introduction this puts to rest one of the final pieces of outstanding litigation for Intel. They have settled with the FTC, they have settled with AMD, and now they have settled with NVIDIA. The only outstanding item is the EU’s fine, which may take a number of additional years to resolve, and in the meantime in light of the FTC settlement it’s hard to believe that Intel will win that battle.
At the end of the day NVIDIA is receiving 1.5 billion dollars, continued rights to make C2D chipsets, and unspecified patent protection for their ARM-based Project Denver CPU. Meanwhile Intel will continue to have access to NVIDIA’s graphics patents enabling them to produce IGPs, and some additional security in the x86 market by continuing to lock NVIDIA out of it. NVIDIA seems to have gotten the better end of the deal here, but Intel certainly got something out of the deal too.
|Intel Settlement & Fine Costs|
It’s worth noting that on top of the explicit costs of fighting these legal battles and the implicit costs of cross-licensing, these fights have taken their toll on Intel’s finances. They’re still a highly profitable company, but between the EU fine, the AMD settlement, and now the NVIDIA settlement Intel is on the hook for roughly 4.2 billion dollars. This is roughly the company’s net income for 2009 – or in other words so long as the company is functioning well their settlement costs are only a fraction of their profits over the past decade.
At the same time just because Intel has settled their legal matters doesn’t mean it’s smooth sailing for the chip fab company that has a design addiction. Intel is facing a competitive market in a whole new direction: mobile/SoC. x86 is firmly in their hands, but ARM and future generations of Atom are set to compete in the SoC market, and at the same time NVIDIA’s ARM-based Project Denver could upset the server market in a way not seen in years. Intel has their work cut out for them, and as we’ve seen should they falter there are plenty of other companies waiting to capitalize on the opportunity. Lawsuits, fines, and inquiries may sound scary, but the biggest threat to Intel remains all the other companies that want to take down the 800lb gorilla of the silicon world.