In case of a possible sales of Intel, AMD may obstacle an obstacle due to a cross license agreement. This can have significant effects in the sector.
IntelIn recent years, due to financial difficulties, it is evaluating sales or partnership options. However, the cross license agreement with AMD may put a serious obstacle to these plans. This agreement between the two companies enables both sides to use each other’s patents, but contains strict conditions such as the termination of the agreement in case of property changes.
Cross License Agreement between AMD and Intel
The cross license agreement between AMD and Intel includes especially X86 processor architecture and its improved extensions (such as SSE, Avx). This agreement is vital for both companies to develop modern processors. According to the agreement, if one of the parties goes to the property change through merger, sales or partnership, the agreement automatically ends and the parties must negotiate again.
This came up with rumors that Broadcom had evaluated the purchase of the product business unit of Intel. If Intel is sold to a company like Broadcom, AMD will have to agree to make a new cross license agreement. However, Broadcom’s entry into the CPU market may mean a greater competition for AMD, and it remains unclear how AMD will take an attitude.
The termination of the cross -license agreement may adversely affect not only Intel, but also AMD. Without this agreement, both companies may have difficulty developing modern X86 processors. In addition, if Broadcom purchases Intel, AMD may face a new opponent. If Broadcom creates a platform equipped with both CPU and artificial intelligence processors, the competition for AMD may become more tough.