-+-+-+-+-+-+-+-+-+-+-+- - - 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 - -+-+-+-+-+-+-+-+-+-+-+- - - 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. - -+-+-+-+-+-+-+-+-+-+-+-