[Info-vax] Poulson at hot-chips 2011

[Neil Rieck]

On Aug 29, 6:59 am, Michael Kraemer <M.Krae... at gsi.de> wrote:
> Neil Rieck schrieb:
>
>
>
> > Thanks for this, you were reading my mind. It was my intention to do a
> > little Googling this morning to find some decade-old news articles
> > supporting the claim that Intel was caught ripping off DEC.
>
> Go ahead, still no evidence that this was ever true.

Okay, well here is one news piece from 1997 that sums up the results
of the legal dispute:

NSR

http://www.wired.com/techbiz/media/news/1997/10/8024
------------------------------------------------------
Intel, DEC Settle Alpha Chip Dispute
Daniel S. Levine Email 10.27.97

Intel Corp. and Digital Equipment Corp. said today that they have
reached a 10-year agreement that included the US$700 million sale of
DEC's semiconductor manufacturing operations to Intel, putting a quick
end to potentially bruising litigation.

Analysts said it was a "face-saving" agreement that will benefit both
companies.

"It's a net benefit for both companies," said C.B. Lee, an analyst
with Sutro & Co. "It's a good compromise solution. The alternative is
for both companies to enrich the lawyers."

Under terms of the deal, Intel will get a state-of-the-art
semiconductor fabrication facility in Hudson, Massachusetts, as well
as development operations in Jerusalem and Austin, Texas, for book
value. The company will also serve as a foundry for DEC's 64-bit Alpha
processor. DEC has committed to building systems based on Intel's new
generation of 64-bit chips. Intel will make an unspecified payment
described as "insignificant" to DEC as part of a cross licensing of
patents between the two companies.

"With the addition of a state-of-the-art [facility], new revenue
stream, and endorsement of future systems based on Intel's IA-64
family of processors, I think we've reached a very beneficial
agreement for Intel," Intel president Craig Barrett said in a
conference call with analysts and reporters.

In addition to receiving a $700 million payment from Intel, DEC will
benefit from eliminating continuing expenses associated with
maintaining and improving its fabrication facility and from the
economies of scale that Intel enjoys. DEC will retain ownership of the
Alpha processor and retain the design and support team.

"It's a much more efficient business model for us - one that does not
require Digital to continue to make substantial and continued
investments in semiconductor process development and manufacturing
facilities," DEC chairman Robert B. Palmer said in the teleconference.
"We will benefit from world-class economies of scale and their ability
to implement leading-edge semiconductor technologies more rapidly than
we can afford to do on our own."

The agreement will require government approval. Intel is currently
under a broad investigation by the Federal Trade Commission into its
business practices, but the company said it expects to win approval
for the agreement with DEC. "We've structured this in a way that there
is a minimal overlap in the products," said Tom Dunlap, Intel's vice
president and general counsel. "Digital retains full rights to do
their Alpha design and Alpha manufacturing if they want, so we think
it should pass the government's review."

Last week, an analyst's report of an impending settlement between the
two companies placed the value of the agreement at $1.6 billion and
speculated half that amount would take the form of discounts to DEC.
But Intel refused to expand on the terms of the deal beyond its
official statement. "We wouldn't comment on any of our large OEMs with
terms to price," said Intel spokesman Chuck Mulloy, speaking of DEC.
"They will be on an equal footing. This is a $700 million deal as far
as Intel is concerned." Intel did however say the that $700 million
would be treated as a capital expense and not as a one-time charge on
its books.

In May, DEC filed the lawsuit in federal court alleging Intel's
Pentium line of chips infringed on 10 of DEC's patents. DEC has
claimed that it approached Intel about a working together on the chip
technology in 1990 and later offered to license the Alpha technology
to Intel for use in improving the performance of its chips. DEC said
Intel studied the chip, but decided not to go with it.

Intel fired back with a counterclaim that DEC had misappropriated
trade secrets and that it had breached its contract with Intel
relating to a joint research project. The company in August expanded
its counterclaim to include allegations that DEC had infringed on 14
Intel patents.

Some of those infringement claims were broken off into a separate
federal suit filed by Intel that same month. The dispute with DEC was
seen as part of the impetus for the Federal Trade Commission to launch
an investigation into Intel. Though some speculate that the agreement
would quell concerns at the FTC, others said that the investigation is
broader than the DEC case and should not stop the commission from
proceeding.

Jonathan Joseph, an analyst with NationsBanc Montgomery Securities
thinks the deal will benefit both companies, but doubts any serious
long-term commitment to the Alpha chip. "This is a face-saving way to
let the Alpha die," he said.