Intel Pokes at AMD Spinoff Plan

SAN FRANCISCO -- Advanced Micro Devices'(AMD Quote - Cramer on AMD - Stock Picks) grand plan to split its operations in two is already raising some questions -- from Intel(INTC Quote - Cramer on INTC - Stock Picks).

Hinting at what could turn into a new front in the long-running battle between the two chipmakers, Intel spokesperson Chuck Mulloy said Tuesday that Intel has "serious questions" about AMD's latest move, particularly as it relates to an intellectual property agreement.

AMD is party to a cross-license agreement with Intel, under which it is allowed to use Intel patents and for which it pays Intel royalties, Mulloy explained. Because that agreement is confidential, Mulloy said Intel was unable to elaborate on the specific nature of Intel's questions regarding AMD's plan to form a separate chip manufacturing company.

Intel and AMD produce virtually all the microprocessors used in PCs, which are based on Intel's x86 instruction set.

On Tuesday, AMD announced that it was spinning off its chip factories, and forming a separate chip manufacturing company through a joint venture with the Abu Dhabi-based Advanced Technology Investment.

During a conference call announcing the deal Tuesday, AMD executives said the spinoff plan did not run afoul of its licensing agreements.

"This deal is structured in a way to keep us consistent with the obligations we have under all our IP cross licenses," said CEO Dirk Meyer.

Intel and AMD are fierce competitors, with a long history of rivalry in the marketplace and in the courts. In 2005, AMD sued Intel for antitrust violations, alleging that microprocessor giant has consistently abused its monopoly position in the market to prevent PC vendors from using AMD chips. Last year, European regulators charged Intel with similar violations. Intel has denied any wrongdoing.