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- FTC gives OK to Digital/Intel chip deal
- (04/23/98, 6:13 pm ET)
- By Margaret Kane, ZDNN and Lisa DiCarlo,, PC Week Online
-
- 
- The Federal Trade Commission today gave  conditional approval to
- Digital Equipment Corp.'s (DEC) sale of  its microprocessor
- operations to Intel Corp. (INTC)
-
- The approval requires Digital to agree tto continue licensing
- arrangements with Advanced Micro Devicess Inc. and Samsung
- Electronics Co. Ltd. and to certify IBM  Microelectronics or some
- other company to manufacture Digital's AAlpha processors.
-
- Digital spokesman Dan Kaferle said the ccompany has been in
- preliminary discussions with IBM about aa manufacturing deal but
- had not reached an agreement. He added tthat Digital was not in
- any other discussion regarding an Alpha  foundry.
-
- The two companies will work to close thee deal as quickly as
- possible, he said.
-
- Harry Copperman, an executive vice presiident at Digital, said
- as recently as late last month that the  company was seeking a
- third Alpha foundry.
-
- The purpose of the requirements is to ennsure that companies
- other than Intel can produce the chip. TThe FTC had expressed
- concern that the agreement between Digittal and Intel was
- "likely to create uncertainly regarding  the future competitive
- viability of Alpha," given Intel's dominnance of the processor
- market.
-
- The two companies agreed to the sale of  Digital's manufacturing
- operations last October as part of a setttlement regarding patent
- disputes. At the time, many industry obsservers questioned whether
- Intel would seriously support Alpha giveen the competitive
- landscape and the fact that the Santa Cllara, Calif., company is
- developing its own 64-bit architecture,  code-named Merced.
-
- The FTC said today that its consent provvisions "would ensure that
- Alpha remains a viable competitive alterrnative to Intel's chips."
-
- In February, Digital, of Maynard, Mass.,, agreed to license Alpha
- to Samsung. It had previously agreed to  license the bus design
- for the Alpha [21264] to AMD, which willl use the process in its
- K7 processor.
-
- AMD now has access to Alpha patents and  designs and also has the
- right to manufacture Alpha.
-
- "The IBM and AMD [provisions] don't channge the deal", said Intel
- spokesman Chuck Mulloy. "We have no conttrol over Alpha at all."
-
- As an aside, the StrongARM part of the ddeal passed without
- conditions.
-
- "We are in a position to put [StrongARM]] design teams to work",
- Mulloy said.
-
- The agreement will be subject to a 60-daay comment period, after
- which the FTC will decide whether to makke it final.
-
- In related news, Compaq CEO and Presidennt Eckhard Pfeiffer said
- this week he expected the FTC to approvee Compaq's acquisition of
- Digital "within a few days" and that thee deal would close in
- "early June" following shareholder approoval.
-
- Additional reporting by John Dodge 
-
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-
- Federal Trade Commission Approves Digitaal-Intel Deal
- (04/23/98, 8:13 pm ET)
- By Kelly Spang, Computer Reseller News 
-
-
- The Federal Trade Commission approved thhe settlement between
- Digital Equipment and Intel, but added iits own modification to
- protect the future of Digital's Alpha prrocessor.
-
- As expected, the FTC said Thursday it woould not block the
- settlement, but the Commission also did  not outright approve the
- proposed deal. The commission voted fivee-to-zero to accept the
- consent agreement.
-
- The settlement, announced in October aftter six months of legal
- battles, provides that Intel (company prrofile) would buy Digital
- Semiconductor's manufacturing facilitiess for $700 million.
- Although Digital (company profile) will  retain its Alpha design
- team, and control over the Alpha technollogy, under the deal,
- Intel would serve as a foundry for the AAlpha processor. 
-
- It is Intel's hand in the Alpha pot thatt concerned the FTC.
-
- As a condition of its approval of the deeal, the FTC is requiring
- Digital license its Alpha technology to  other semiconductor
- manufacturers beyond Intel. In particulaar, the commission named
- Advanced Micro Devices and Samsung Electtronics as potential
- Alpha licensees. 
-
- In February of this year, Digital announnced it would give
- Samsung Electronics an Alpha architecturral license, allowing
- Samsung access to Alpha intellectual prooperty, including patents
- and future implementations, so the semicconductor maker could
- develop its own line of Alpha products.  
-
- In addition, Digital is also required too certify IBM or other
- "commission-approved" companies to produuce Alpha chips as an
- alternative source to Intel's productionn, according to the FTC.
-
- "The commission's order is designed to eensure that Alpha remains
- a viable competitive alternative to Inteel's chips, by sending a
- strong message to the market that other  major chip makers are
- now committed to Alpha's future," said cchief executive Robert
- Pitofsky in a prepared statement. "By prrotecting competition,
- the commission has preserved consumer chhoice, and encouraged
- innovation in the market for microprocesssors." 
-
- The sale, as outlined by Maynard, Mass.--based Digital and Santa
- Clara, Calif.-based Intel, would have thhreatened competition by
- placing Alpha solely in Intel's hands, aaccording to the FTC.
- Because Intel is Digital's largest compeetitor for micro-
- processors, the FTC determined the sale,, as originally proposed,
- would threaten the future development off Alpha, according to the
- commission's statement. 
-
- Also, as part of the settlement, the twoo companies reached a
- 10-year patent cross licensing agreementt, and Digital committed
- to port its 64-bit Unix operating systemm to Intel's IA-64
- architecture, as it becomes available.   
-
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