Unless you’ve been living under a rock, you already know that Intel just made a massive $1.25 billion settlement with AMD to settle all legal disputes.  Plenty of others have written about this settlement, but I’m left wondering:  Did Intel simply decide to cut its losses, or does this settlement reflect a more profound change of heart?

From what I’ve read in the press, I’m tempted to think that this was a purely financial decision.  Here’s what Intel’s CEO said:

"The AMD antitrust case has been massive and threatened to become even more so as the court date approached," Intel CEO Paul Otellini, said during a conference call. "In court, damages are tripled, and this type of case can have huge losses. Most antitrust cases are settled out of court, not because the parties are guilty, but because the costs can be so huge. That's what happened here."

Sounds pretty cut and dried, but I suspect that there is more to the story.  I completely agree with the commenter on this EE Times story:

I think the reason why Intel settled with AMD out of court is that it no longer sees AMD as its main rival. With the Intel Atom being the only product pushing up Intel's revenues in the last year, it needs to focus on more on mobile processors where it has its task cut against the TI OMAP3 and other ARM based processors.

Intel is fully aware that there is precious little growth left in the PC and server markets.  If the company wants to keep expanding, it is going to have to get more design wins in mobile and embedded markets.  These markets simply don’t tolerate bully-like behavior, nor will they allow any one company to gain monopoly (or near-monopoly status).  If Intel want to succeed in embedded, it must find a new way of doing business.

And I think Intel is doing just that.  I’ve had the pleasure of working with Intel on their embedded push, and I can tell you from first-hand experience that the company “gets” embedded.  The company is ditching the “my way or the highway” approach that characterized its PC business in favor of an approach based on the needs of its customers.  (Full disclosure: I still do occasional paid consulting with Intel, so I have a financial stake in the company’s embedded success.)

My own experiences with Intel make me think the AMD settlement reflects this new approach.  I’m encouraged by this development, and I hope to see both Intel and AMD play bigger roles in embedded markets.  The companies have a lot to offer us, and I’d be thrilled to have them bring their full attention to our domain.

Parting thought: There is also more to this settlement than meets the eye from the AMD perspective.  The NYT raises an interesting point:

Besides cash, the settlement gives A.M.D. greater freedom to produce chips at different contract factories around the world. Under a patent cross-licensing deal with Intel, A.M.D. was restricted in producing large volumes of chips in any factory not owned by A.M.D. or a subsidiary.

That part of the agreement, analysts say, could eventually allow A.M.D. to reduce its stake in its former chip-making operations, which in March were spun off into a money-losing joint venture called Globalfoundries. In the third quarter, A.M.D. had operating income of $47 million, excluding the losses from Globalfoundries, on revenue of $1.4 billion.