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Hey Intel, you didn't pass go!

  • JBC
  • Mar 25, 2017
  • 4 min read

A “Monopoly” is when “one company owns the exclusive rights to a certain good or service, and can charge anything they wish, even if the product is not worth the price. Or it can be defined as exclusive control of a commodity or service in a particular market, or a control that makes possible the manipulation of prices,” according to dictionary.com.

Luckily such a thing as a monopoly is something that the US hasn’t witnessed before – mainly because there are laws put in place to prevent it (or remove it if it occurs). This is primarily because a monopoly runs in complete opposition to the principles of capitalism. However it has gotten close, the company in question is Intel, a semiconductor manufacturing company that was founded on July 18, 1968.

They started making semiconductors and has since expanded into producing other forms of technology for the PC market. However they are now considered the largest semiconductor making company with As of 2015, Intel has over 106,000 employees worldwide, sales of $55.9 billion, assets of $92 billion and a market capitalization of $162.9 billion according to Investopedia, and Solid earnings with GAAP net income of $10.3 billion; non-GAAP net income of $13.2 billion is claimed by intel itself for the Q4 of 2016.

Intel has remained at the top using top of the line production lines as well as using deals that are less, than fair, According to Bloomberg, Intel’s microprocessors are used in over 80% of global PCs sold each year, and the company has nearly 100% of the market for servers that are built on PC chips.

With costs to build leading-edge manufacturing facilities rising (it becomes increasingly difficult to build smaller chips), fewer companies are able to compete with Intel’s advancements in performance, energy efficiency, and cost.

The topic of Intel and them having a monopoly has been stated several times over the years, but after AMD (Advanced Micro Devices Inc) released a new chip, has sparked the discussion again. "The IT industry is being held hostage by Intel," Ruiz proclaimed, "a fact that has detrimental effects across the board, and it has gone on for too long. Consumers are punished by less choice and innovation, and higher prices,” was stated in 2007.

Ruiz cited examples of both upheld and alleged anti-competitive behavior on Intel's part, including findings that it paid for exclusivity rights among Japanese computer manufacturers. Intel's alleged exclusivity deals with German retailers (which is the subject of AMD's antitrust suit against it in the US). Also included is a shareholder lawsuit against Dell, alleging that the company received $1 billion per year in rebates from Intel prior to its decision last year to end its exclusivity arrangement and do business with AMD.

According to Cnet, on Thursday, November 12th 2009, Intel agreed to pay AMD 1.25 Billion dollars as part of the settlement on the long running antitrust case that was started in 2004. In addition, Intel has agreed to "abide by a set of business practice provisions.”

In turn, AMD says it will drop all pending litigation, including the case in U.S. District Court in Delaware and two cases pending in Japan, and will also withdraw all of its regulatory complaints worldwide. Such a result can’t look good and during the case many things were said.

Intel claims in its response that A

MD is seeking to blame Intel for its own "many business failures ... that have determined its position in the marketplace." AMD's position in the marketplace "reflects its uneven track record, and its repeated failure to deliver on its promises."

Specifically, Intel points to AMD's "playing it safe ... with anemic investment in manufacturing capacity, leaving Intel to shoulder the burden of investment to enhance the usefulness of computers and enhance the market."

In addition, Intel claims AMD has been "dogged" by a reputation of being unreliable as a supplier, has traditionally lagged in innovation, and has seen products delayed well beyond original launch dates. "In short," Intel wrote in its response, "AMD's colorful language and fanciful claims cannot obscure its goal of shielding the company from price competition."

Tom McCoy, executive of legal affairs and chief administrative officer for AMD, says Intel's response is "an attempt to divert attention from what this case is really about. Crossing swords of rhetoric is fun, but it's time to put the truth on the table in the courtroom. The industry problem is that [computer manufacturers and retailers] are under threats from retaliatory and potentially lethal price increases by Intel if they give too much business to AMD."

Luckily as time has passed several large companies including, Facebook, Apple, Google, have stated that they wish to make their own chips and try to get over Intel’s pricing. Many people have been curious as for how AMD is going to kick it off as their new product has both better performance and a cheaper price than the Intel product. Another thing that brought up these thoughts was the Intel insider was something that allowed better streaming but was only on one model and not the past ones.


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