The Future

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
European Union AMD NVIDIA
~$1.45B
$1.25B
$1.5B

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.

The Settlement
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  • vol7ron - Tuesday, January 11, 2011 - link

    Yes. I want to also say, that I was not serious about the EU comment. I'm not exactly sure what happened there and I think everyone knows EU business is important, both to intel and the global economy.

    I just re-read what was written and it seemed more sour then humorous. I hope this clarifies it was not meant to be serious.
    Reply
  • Phoenixlight - Tuesday, January 11, 2011 - link

    it makes it seem like the FTC is the bad guy


    Intel has been breaking laws and being a general dick for quite a long time now. Intel is the bad guy and they should be sued another 100billion for wasting everyone's time lying in the courts pretending not to have done anything wrong.
    Reply
  • anactoraaron - Monday, January 10, 2011 - link

    "intel doesn't get" in the last table should be changed from "?" to "keeping 1.5 billion dollars"

    HA!
    Reply
  • smookyolo - Tuesday, January 11, 2011 - link

    I second this. Reply
  • neutralizer - Monday, January 10, 2011 - link

    "While Intel’s approval isn’t necessarily essential for Denver like it would be for an x86 CPU, it clearly is easier to build Denver without the risk of NVIDIA suing the pants off of NVIDIA again."

    Page 2.
    Reply
  • GeorgeH - Monday, January 10, 2011 - link

    Great article, thank you.

    For the curious, Intel made ~$60 Billion (profit) in the past decade, so ~4.2 Billion really is a tiny faction (~7%.)
    Reply
  • Muhammed - Tuesday, January 11, 2011 - link

    Several other sites are stating that NVIDIA does get the rights to DMI/QPI chispets , but they are still not going to make them , and instead will focus on Denver and Tegra .

    The sites are:
    1- http://techreport.com/discussions.x/20222
    2-http://www.brightsideofnews.com/news/2011/1/10/nvi...
    3-http://arstechnica.com/business/news/2011/01/intel...

    so who is right ?
    Reply
  • Ryan Smith - Tuesday, January 11, 2011 - link

    I have every reason to believe we are.

    From the amended chipset licensing agreement:

    "NVIDIA Licensed Chipsets shall not include any Intel Chipsets that are capable of electrically interfacing directly (with or without buffering or pin, pad or bump reassignment) with an Intel Processor that has an integrated (whether on-die or in-package) main memory controller, such as, without limitation, the Intel Processor families that are code named ‘Nehalem’, ‘Westmere’ and ‘Sandy Bridge.’”

    It specifically spells out the fact that NVIDIA can't make chipsets for Nehalem or SB generation CPUs.
    Reply
  • Muhammed - Tuesday, January 11, 2011 - link

    Thanks for confirmation , I guess they misunderstood the statements . Reply
  • Sabresiberian - Tuesday, January 11, 2011 - link

    Funny how an idea gets put out there and taken up by others in the media and spread around, regardless of whether it is correct, isn't it? Makes you wonder how many people who write for the "news" actually go to the source and how much of what we see depends on the first reporter getting it right.

    I always roll my proverbial eyes when someone says "everybody knows" something. Right, there's proof for ya, "everybody knows" it.

    Thanks Ryan for being someone who goes to the actual source of information, not just another person's report of it.

    ;)
    Reply

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