Intel Corp. has agreed to pay Advanced Micro Devices 1.25 billion US dollars to settle a series of worldwide antitrust and patent disputes between the two chipmakers, the companies said Thursday.
The agreement comes with Intel, the world's biggest maker of semiconductors, facing increasing litigation around the world linked to its dominant position in the sector.
The companies said in a joint statement that the settlement represents "a comprehensive agreement to end all outstanding legal disputes between the companies, including antitrust litigation and patent cross license disputes."
"While the relationship between the two companies has been difficult in the past, this agreement ends the legal disputes and enables the companies to focus all of our efforts on product innovation and development," the statement said.
AMD and Intel agreed to patent rights from a new five-year cross license agreement, and to give up any claims of breach of contract.
In addition to the payment of 1.25 billion US dollars, Intel has also agreed to abide by a set of business practice provisions.
AMD will drop all pending litigation including the case in US District Court in Delaware and two cases pending in Japan and will withdraw all of its regulatory complaints worldwide, the statement said.
The news comes just a week after the attorney general of New York state filed an antitrust lawsuit against Intel alleging the chip giant engaged in illegal practices to dominate the market.
It accused the company of "exacting exclusive or near-exclusive agreements from large computer makers in exchange for payments totaling billions of US dollars" and threatening retaliation against firms that did not fall in line.
The suit is the latest legal challenge for Intel, which is already being investigated by the US Federal Trade Commission.
European Union antitrust regulators fined Intel a record 1.06 billion euros (1.45 billion US dollars) in May, claiming the company abused its stranglehold on the semiconductor market to crush AMD.
Intel denied the charges and has appealed the EU ruling.