An arbitrator in a closely watched Silicon Valley case has left open the possibility that Intel Corp. may have to forgo its monopoly on the computer industry's biggest-selling microprocessor, the 80386.
The decision, announced yesterday, comes in a contentious, three-year contract dispute between two of the fiercest competitors in the computer-chip industry -- Intel Corp. and Advanced Micro Devices Inc. The case centered on whether AMD will gain the right to make the 80386, a chip that is at the heart of millions of personal computers and accounts for an estimated $1 billion of annual sales to Intel.
In the chip industry, much is to be gained by selling copies of another firm's popular chip -- and AMD is among several firms that has its eye on the 80386. While AMD and others are expected to come out soon with so-called "386 clones" that attempt to engineer around Intel's patents and copyrights, AMD has argued that it has had, in addition, a legal right to obtain the chip's design from Intel under a 1982 technology-sharing pact. Intel, which developed the 386 and has clung to a highly profitable monopoly, has claimed that AMD never earned the right to make it.
Both firms declared victory under the new decision, in which a court-appointed arbitrator in San Jose chided Intel for "preaching good faith but practicing duplicity," while also noting that AMD failed to deliver on several technical requirements of the contract.
While Intel officials said they expect only monetary damages when remedies are decided next year, the ruling left open the possibility that Intel could be compelled to transfer the 386 to AMD.
Two analysts, however, said they consider it unlikely that a transfer would be ordered.