FTC sets conditions to support Digital-Intel agreement on chip
Article Abstract:
The FTC approved a patent settlement between Intel and DEC but required DEC to find other partners to manufacture its Alpha microprocessor chip. Terms of the unusual deal call for DEC to complete an Alpha licensing deal with Intel rival AMD and reach an agreement with IBM or another FTC-approved company on chip production. The FTC, expressing concerns over Intel's domination of the microprocessor market, said it could withdraw its support as early as Jun 1998 if DEC fails to meet its responsibilities. Intel holds a 90% share of the processor market, but the FTC wants to keep Alpha viable despite its 1% market share. The speedy Alpha chips power some of the most powerful computers, and Intel wants to enter this lucrative market. DEC and Intel reached a proposed settlement of a 1997 DEC lawsuit that charged Intel with stealing Alpha patents and using them in its Pentium microprocessors. In the settlement Intel agreed to buy DEC's alpha chip plant for $700 million and in return grant the company discounts and other favors.
Publication Name: The Wall Street Journal Western Edition
Subject: Business, general
ISSN: 0193-2241
Year: 1998
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DEC cuts prices by up to 47% on its line of Alpha-based servers, workstations
Article Abstract:
DEC has aggressively reduced pricing on its line of Alpha servers and workstations by up to 47%. DEC has most significantly lowered the prices of its midrange servers running Microsoft's Windows NT. For example, DEC cut the price of an AlphaServer 4000 processor featuring 512MB of memory by 47%. DEC's high end products, such as the AlphaServer 8400 which includes a 440MHz processor and 8GB of memory, have also been cut by up to 27%. DEC hopes that its new pricing strategy will help it recover from several quarters of disappointing earnings. Analysts predict that DEC will earn between $15 million and $25 million on approximately $3.4 billion in sales for its 2nd qtr which ended Dec 29, 1996. During the same period last year, analysts forecasted $148.8 million in earnings on $3.95 billion in sales. Although analysts recognize DEC's preliminary pay-offs resulting from increased sales of Alpha products, they maintain that DEC's ultimate success depends on its ability to become more competitive.
Publication Name: The Wall Street Journal Western Edition
Subject: Business, general
ISSN: 0193-2241
Year: 1997
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Digital to sell plant to Intel amid dispute
Article Abstract:
DEC announced that it would sell its semiconductor production operations to Intel for $700 million. The accord would dissolve a bitter patent dispute that DEC started in May 1997, accusing Intel of stealing Alpha microprocessor chip technology for use in its Pentium line. Other financial terms were not available, but people close to DEC said long-term considerations such as chip licensing fees and discounts could place the deal's value at more than $1.5 billion. Intel sources said it purchased DEC's Hudson, MA-based chip production facility, which produces the Alpha chip. Intel added that it would offer DEC undisclosed discounts on its chips and licensing fees. Intel declined to comment on DEC insiders' reports that it would pay DEC $200 million to license Digital chips through 2001. DEC and Intel, which has filed a counterclaim suit, would agree to halt their legal action. Intel also would continue production of the Alpha chip through 2004.
Publication Name: The Wall Street Journal Western Edition
Subject: Business, general
ISSN: 0193-2241
Year: 1997
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