It is obvious by the comments others have left here that a small minority of readers actually know what is happening.
This issue arose shortly after AMD made their original announcement to "spin off" their fabrication facilities. Intel expressed concerns at that time and again in October when Intel formally requested additional information from AMD with regard to their relationship to GlobalFoundries Inc. (http://www.reuters.com/article/marketsNews/idUSN0748080720081007). "Mulloy [an Intel spokesperson] said Intel has asked AMD to make the agreement [between AMD and Advanced Technology Investment Co (ATIC), an Abu Dhabi state-owned venture capital firm] public, but he said it would not."
AMD still has not made the requested documents public. The only way Intel can determine if GlobalFoundries Inc. meets the definition of a subsidiary as specified in the cross licensing agreement is for AMD to provide details about the transaction with ATIC. AMD continues to refuse to make that information available to the public or to Intel. Intel is taking the appropriate action to request mediation in the matter which will require AMD to produce the requisite documentation.
The reason for the timing is that AMD's SEC filings clearly indicate that ATIC is the majority stakeholder of GlobalFoundries Inc. and those documents were not available until March second. It took Intel less than two weeks to file with the SEC on this issue, so the speculation about timing is nonsense.
To complicate the situation for AMD, Abu Dhabi already owns a significant stake in AMD proper (through several investment vehicles), which further dilutes AMD's actual position in GlobalFoundries Inc. AMD's primary contribution to GlobalFoundries Inc. is in the form of their fabrication facilities located in Dresden, Germany. AMD attempted to sell those facilities last year in order to raise needed capital, but could not find a buyer. Fab 30/38 does not have much value at this time because it is undergoing a massive retooling to update it's process technology from 200mm/90nm to 300mm/65nm and 45nm. However, AMD stopped the upgrade and halted all capital expenditures for it early last year. It is estimated to require an additional $2 billion US to complete the modernization of the facility. Fab 36 is the real AMD contribution to GlobalFoundaries Inc. It currently produces AMD's 65nm products and is also being converted to a 45nm production facility which should produce yields later this year. Fab 36 has value, but also debt which ATIC is assuming and that makes its valuation difficult. It is likely that AMD has significantly overvalued these assets to offset the ATIC capital investment in GlobalFoundaries Inc. because AMD's debt position simply did not allow them to equal that position. We will not know for sure until this valuation is made public by AMD or ATIC, if ever. Therein lies the crux of Intel's complaint. That is, AMD neither owns nor controls fifty percent of the outstanding shares of GlobalFoundaries Inc., and therefore GlobalFoundaries Inc. does not meet the definition of a subsidiary according to the patent cross license agreement which reads as follows:
1.22. "Subsidiary" shall mean any corporation, partnership, joint venture,
limited liability or other entity, now or hereafter, in which a
party
(a) owns or controls (either directly or indirectly) or originally
contributed (either directly or indirectly) at least fifty
percent (50%) of the tangible and intangible assets of such
entity; and
(b) owns or controls (either directly or indirectly) either of the
following:
(1) if such entity has voting shares or other securities, at
least fifty percent (50%) of the outstanding shares or
securities entitled to vote for the election of
directors or similar managing authority and such entity
is under no obligation (contractual or otherwise) to
directly or indirectly distribute more than seventy
percent (70%) of its profits to a third party, or
(2) if such entity does not have voting shares or other
securities, at least fifty percent (50%) of the
ownership interest that represents the right to make
decisions for such entity and an interest sufficient to
receive at least thirty percent (30%) of the profits
and/or losses of such entity.
(c) An entity shall be deemed to be a Subsidiary under this
Agreement only so long as all requisite conditions of being a
Subsidiary are met.
This whole issue will likely be resolved in mediation, unless AMD is unwilling to meet the terms of the mediation. I doubt that will happen. Intel's Bruce Sewell said yesterday, "We have attempted to address our concerns with AMD without success since October. We are willing to find a resolution but at the same time we have an obligation to our stockholders to protect the billions of dollars we've invested in intellectual property."
In response to the notification to AMD that resolution will be sought through mediation, AMD claimed that Intel breached the agreement by notifying AMD of its breach. That position is also inconsistent with the terms for dispute resolution as outlined in the cross license agreement.
It will be interesting to watch this develop, but it won't take long before AMD investors take notice and force a resolution. The last thing an AMD stockholder needs right now is more uncertainty about AMD's future (I am speaking from personal experience on this point). Aside from the posturing, both sides will likely come to some agreement and AMD will do what it needs to for GlobalFoundaries Inc. to be able to meet the definition of a subsidiary and for the redacted portions of the cross license agreement to be met.