Intel Corp (INTC)

[Windsock]

Perhaps you can ask yourself why AMD settled for so little if they could have received, by your calculation, 10 times as much after trebling after a trial. Could it be that AMD knew there was a risk of getting nothing if they went to trial.

Any time there is a trial, both parties know that there is a risk of loss. Given the huge numbers at stake, the $1.25 billion payment by Intel was little more than an insurance payment to eliminate the risk of a bad result. When you add in the large benefit Intel received prevented AMD from using the fake subsidiary strategy to give GloFo a license to make X86 processors for the rest of the world -- without having to spend a dime on a law suit -- the settlement was a big win for Intel.

The settlement was also a big win for AMD who received enough money to survive for a couple years under new management and attempt to find a business plan for long term survival. Without the settlement money AMD would not have survived for long.

Isn't it interesting how a settlement has something good for both sides.