A Chip on His Shoulder
AMD hopes its partnerships with computer makers Hewlett-Packard, IBM, and Sun Microsystems will help it win new business. Recent successes in the server market include Unilever, 7-Eleven, and Airbus. AMD has made inroads into the corporate desktop market with deals with Northeast Utilities and the U.S. Air Force. "Many of the 64-bit products were in the latter stages of development when Ruiz took over, so he was being dealt a reasonable hand," says Nathan Brookwood, an analyst and consultant in the semiconductor industry for Insight 64. "He played it well."
AMD has also had success in the consumer market with its Athlon chips, which power notebooks and desktops made by the likes of Gateway and HP. But it's a tough slog: Dell's reliance on Intel limits how much headway AMD can make. Intel's relationship with Dell and its highly successful "Intel inside" marketing strategy are targets of AMD's antitrust complaint against Intel. Many in the industry question whether AMD has the manufacturing capacity to compete against Intel should Dell decide to throw it some business, but Ruiz insists the company would find the capacity if it needed to. "We cannot ignore them, but they've chosen to ignore us based on a series of financial incentives," says Henri Richard, AMD's chief sales and marketing officer.
The alleged financial incentives are detailed in AMD's complaint, which Intel adamantly denies. The federal court filing is a lively read, giving one example after another of how Intel purportedly bullies computer makers, distributors, and retailers into excluding AMD from deals. In all, it mentions 30 major players in the computing world and quotes several high-profile industry executives. It argues that Intel's tactics have prevented AMD from winning business in spite of its competitive products.
Intel countered last month, filing an answer to the complaint in which it denies the bulk of AMD's allegations and insists it operates within antitrust laws. It says AMD is to blame for its own low market share. "AMD's position in the marketplace reflects nothing more than the choices AMD has made and its track record with its own customers," Intel writes. Intel spokesman Chuck Mulloy says it is merely competing. "AMD has a very competitive product, and the market has responded."
AMD's antitrust action is not the only one Intel faces. Earlier this year, Japanese authorities charged Intel with violating antitrust laws, which Intel did not dispute. In addition, the European Commission and South Korea are investigating Intel's practices. "There is growing international concern," says Chuck Diamond, who represents AMD in the case. In addition, more than 60 class action lawsuits have been filed, mostly in California and Delaware.
While some industry insiders perceive AMD's suit as merely a vehicle to raise consumer awareness about its products, others see it as a viable lawsuit. "This is the best-written complaint I have read in an incredibly long time," says David Balto, a former policy adviser for the Federal Trade Commission who is not involved in this case. "I think even if they are in front of a conservative court, if they can prove their allegations, the court will be sympathetic."
advertisement
