Intel rival to sell 'clone' 486 chips: Market leader faces competition from its own design after court verdict

INTEL, the Silicon Valley firm that dominates the market for semiconductors in personal computers, is suddenly facing competition for its 486 computer chips.

Advanced Micro Devices announced yesterday that it planned to start selling a rival chip based on Intel's design immediately following a court victory against Intel last Friday. In a surprise ruling, a California judge overturned a jury decision that banned AMD from selling the cloned chips and ordered a retrial.

AMD, whose own 486 design was not expected to enter the market until June, said it saw 'no legal barrier' to selling the chips or to cloning its more powerful successor, Intel's Pentium microprocessor, which is just starting to come on to the market.

The decision pushed Intel's share price down 15 per cent and prompted some investment advisers to buy AMD shares on a speculative basis. By midday AMD shares were up dollars 3.625 at dollars 27.50 while Intel's were off dollars 14.25 at dollars 95.75, causing an Intel spokesman to suggest the market was overreacting to the news.

AMD has the capacity to produce only 1 million of the chips this year, compared with the 6 million Intel is projected to sell. Demand for the 486 also continues to outstrip supply, industry analysts point out, arguing that AMD's entry will be at little more than 'annoyance level' for the semiconductor giant.

While the ruling is likely to result in big short-term profits for AMD, it may have to forfeit those gains if it loses the retrial.

Thomas Dunlap, an Intel executive, also noted that the licensing agreement that allowed AMD to develop the controversial clone expires in 1995, limiting its potential profit from any clone of the Pentium chip.

Many investment advisers, who said the panic created an opportunity to buy Intel cheaply, agreed, and its share price recovered later in the trading session.

'There is only so much damage AMD can do,' said David Wu, an analyst with SG Warburg in New York.

(Photograph omitted)

Start your day with The Independent, sign up for daily news emails
News
Tepper had a stunningly successful career as a songwriter
people
Arts and Entertainment
Len Blavatnik
music
Sport

Today in the Premier League, Everton face Manchester United, and Arsenal take on Chelsea at the Emirates Stadium. A victory for Jose Mourinho's side, and they could win the Premier League title as soon as Wednesday with a win over Leicester.

Arts and Entertainment
tv
News
The original field in High Wycombe, which is used as the banner image on a number of websites belonging to local Tory associations
general election
Arts and Entertainment
Books should be for everyone, says Els, 8. Publisher Scholastic now agrees
booksAn eight-year-old saw a pirate book was ‘for boys’ and took on the publishers
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Business Analyst - Financial Services - City, London

£50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...

SThree: Trainee Recruitment Consultant

£18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is the o...

Day In a Page

General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence
Public relations as 'art'? Surely not

Confessions of a former PR man

The 'art' of public relations is being celebrated by the V&A museum, triggering some happy memories for DJ Taylor
Bill Granger recipes: Our chef succumbs to his sugar cravings with super-luxurious sweet treats

Bill Granger's luxurious sweet treats

Our chef loves to stop for 30 minutes to catch up on the day's gossip, while nibbling on something sweet
London Marathon 2015: Paula Radcliffe and the mother of all goodbyes

The mother of all goodbyes

Paula Radcliffe's farewell to the London Marathon will be a family affair
Everton vs Manchester United: Steven Naismith demands 'better' if Toffees are to upset the odds against United

Steven Naismith: 'We know we must do better'

The Everton forward explains the reasons behind club's decline this season
Arsenal vs Chelsea: Praise to Arsene Wenger for having the courage of his convictions

Michael Calvin's Last Word

Praise to Wenger for having the courage of his convictions