The suit, filed late Monday, provides a fairly detailed and lengthy laundry list of alleged misdeeds by Intel. The complaint alleges that in 2002, for instance, Intel agreed to pay NEC more than 300 million yen per quarter in exchange for caps on purchasing from AMD. AMD's share of NEC's consumer business went from 84 percent to virtually zero in six months, the complaint says. It also states that NEC constrained sales efforts around Opteron-based servers.
HP even turned down free microprocessors from AMD in 2002, while Intel pressured HP senior managers to fire an executive who developed a plan to use AMD chips in HP's Evo brand computers, the complaint states.
"There is no reason, other than Intel's chokehold on the OEMs, for AMD's inability to exploit its products in important sectors, particularly commercial desktops," paragraph 58 of the complaint states.
AMD, though, will also likely have to counter assertions that its success or failure comes as a result of demand, product delays or customer inertia. Simply put, larger chipmakers typically can produce products for less money than smaller ones, and price and familiarity often trump technology.
Microprocessor Report
"The question is, 'can AMD find the smoking gun?'" said Kevin Krewell, editor in chief of the Microprocessor Report. "There is some circumstantial evidence that something is not right."
The complaint, for example, alleges that in late 2000, then-Compaq CEO Michael Capellas stopped buying AMD desktop processors because Intel "had a gun to his head."
AMD further alleges that it was negotiating with IBM on a commercial PC business partnership, which ended after Intel offered IBM "millions" in market development funds.
But in late 2000, the PC market was in a free fall. Jerry Sanders, then-CEO of AMD, said at the time that the company's goal of getting IBM, HP or Compaq to adopt an AMD chip for a business PC that year was being pushed out because of sluggish demand.
Corporate customers are also notoriously conservative, said Krewell, adding that having only one type of chip (versus chips from two companies) can reduce support costs. For AMD, getting that close to a corporate desktop deal was, in fact, a milestone for the company. The company had suffered through five years of financial losses and several product delays from 1995 to 1999. The situation began to turn in late 1999 when Intel began to falter and benchmarks testers said that AMD's Athlon chip bested Intel's desktop parts.
Another opportunity to surge ahead in desktops came in 2003 when AMD came out with a 64-bit desktop chip. While this move could have beat Intel handily, Microsoft had to delay its Windows for 64-bit chips so many times that AMD's potential advantage became ameliorated.
Other parts of the complaint allege that bundling discounts offered as part of Intel's Centrino chip package for notebooks, which debuted in 2003, have also harmed AMD.
A long history in court
But, at the same time, AMD has put most of its efforts in the past few years into breaking into the server market and expanding its reach in the desktop market. The company only came out with a product, Turion, that more directly competes against Centrino notebooks a few months ago. HP has adopted it.
Servers present another likely AMD said/Intel said situation. Paragraph 83 of the complaint alleges that Intel tried to intimidate Fujitsu-Siemens into backing out of supporting AMD's Opteron chip at its April 2003 launch, and said that the European manufacturer would be the only major computer maker present.
As it turned out, IBM showed its support for Opteron at launch. Through Opteron, AMD has also gone from having virtually zero market share in servers to more than 6 percent and contracts with HP, IBM, and Sun Microsystems.
Overall, AMD tends to do well in years where Intel is suffering through problems of its own, such as in 2000 and 2004. When Intel recovers, AMD's opportunities fade, even if it is still scoring better on benchmarks. Still, the growing acceptance of AMD and its track record should, logically, let the company succeed even if Intel is not flailing.
"Technological superiority doesn't always win out," said Dean McCarron, principal analyst at Mercury Research. "But we also have two companies with extremely competitive products."
If anything, the complaint will likely be pored over in minute detail by the legal departments of PC makers. So far, PC makers have adamantly refused to comment on the cases. Nonetheless, executives from many of those companies, including the alleged executive HP almost fired for making overtures to AMD, may be compelled to testify.
