The settlement encompasses several things. First of all, it ends all patent and antitrust disputes between the two chip companies, who together supply almost the entire PC industry with processors. AMD will also withdraw all of its regulatory complaints, worldwide. Intel will pay 1.25 billion USD to AMD. Also part of the settlement is a new 5 year cross licensing agreement.
In a joint statement, the two companies said: "While the relationship between the two companies has been difficult in the past, this agreement ends the legal disputes and enables the companies to focus all of our efforts on product innovation and development."
"We look forward to healthy competition with the mutual respect one would expect between world class competitors," said AMD Chief Executive Dirk Meyer in a conference call about the settlement.
Shares of both companies jumped right after the news. The legal disputes created a lot of uncertainty, and that's not something you want during an economic crisis. While Intel nor AMD speak of admissions of guilt, the fact that Intel is paying up kind of indicates that it knows it's been in the wrong.