EU regulators raid Intel offices

ANTITRUST regulators in Europe have raided the offices of processor giant Intel and several computer retails as part of an investigation of restrictive trade practices.

In a prepared statement, the European Commission said its officials had carried out “unannounced inspections at the premises of a manufacturer of central processing units (CPUs) and a number of personal computer retailers.

Intel has since confirmed that it is the manufacturer whose offices were raided. The German consumer electronics retailer Media Markt and Britains DSG are also understood to have been raided as part of the investigation.

“The Commission has reason to believe that the companies concerned may have violated EC Treaty rules on restrictive business practices (Article 81) and/or abuse of a dominant market position,” the Commission said in a statement.

The investigation and the premises’ raids are thought to be the first stage of a response to complaints to the EC about Intel market behaviour from rival Advanced Micro Devices.

Intel is already the subject of formal EU charges of monopoly abuse of market power, for allegedly customer rebates at below cost and for allegedly bullying customers into staying away from AMD.

Intel has said it would cooperate with the regulatory authorities.

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Intel boosts Green Power stocks

CHIP-MAKER Intel has moved to boost its Green credentials by becoming the largest corporate buyer of Green power in the United States.

The US Environmental Protection Agency latest Green Power Partners Top 25 list puts Intel in the number one position.

Intel also announced yesterday that it would purchase more than 1.3 billion kilowatt-hours a year of renewable energy certificates as part of a broad plan to reduce its impact on the environment.

The company said it hoped the record-setting purchase would help stimulate the market for green power, which should lead to additional generating capacity and ultimately, lower costs.

Renewable energy certificates, or RECs, are the “currency” of the renewable energy market and are widely recognised as a having credible and tangible environmental benefits.

Intel's REC purchase includes a portfolio of wind, solar, small hydro-electric and biomass sources.

“We have a long history of commitment to the environment and energy efficiency is an important consideration in everything we do, from building transistors to designing microprocessors and running our factories,” said Intel president and chief executive Paul Otellini.

Mr Otellini, who is also a member of the Copenhagen Climate Council, a global group of leaders working to achieve an effective global climate treaty at next year's UN Environmental Summit in Copenhagen, said the renewable purchase was just one part of a multi-faceted approach to protect the environment.

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NY investigates Intel sales practice

NEW York Attorney General Andrew Cuomo has launched an instigation of chip-maker Intel amid concerns the company had violated anti-trust laws by coercing customers to exclude its rival Advanced Micro Devices (AMD).

Cuomo served Intel with a wide-ranging subpoena seeking documents and information on the company and its relationship with some customers.

“Our investigation is focused on determining whether Intel has improperly used monopoly power to exclude competitors or stifle innovation,” Mr Cuomo said. “We will also look at whether Intel abused its power to remove competitive threats or harm competition in violation of New York and federal antitrust laws.”

Similar antitrust allegations have been examined by authorities in Europe and Asia and resulted in formal actions, including a cease and desist order, against Intel.

The subpoena served on Intel seeks documents and information concerning Intel’s pricing practices and possible attempt to exclude competitors through its market domination. Specifically it seeks to find whether Intel penalised customers for making purchases from a competitor, or if it made improper payments to customers to keep them from buying a competitors product.

AMD’s executive vice-president for legal affairs Tom McCoy welcomed the investigation.

“New York State’s decision, based on its findings to date, to open a formal investigation of Intel’s anticompetitive business practices is good news for computer buyers in NY and throughout the United States,” Mr McCoy said.

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AMD sells stake to mid-east interests

CHIP-maker Advanced Micro Devices (AMD) has sold an 8.1 per cent stake in the company to the investment arm of the Abu Dhabi government for US$622 million (A$698 million) in cash.

Proceeds from the sale, to the Mubadala Development Company, would be used for general corporate purposes – including the accelerating it long term growth strategy by investing in research and development, product development and manufacturing capability.

Partly to allay US public concerns about Middle East government investment in technology firms, AMD said this was a non-controlling, minority investment and that Mubadala would not receive any board representation as part of the deal.

The transaction did not present a controlling investment or acquisition subject to review by regulatory authorities like the Committee on Foreign Investment in the US (CFIUS), the company said.

“We proudly welcome Mubadala, a world-class investor, to the AMD shareholder family. This investment strengthens AMD’s ability to deliver customer-centric innovation and choice to the marketplace, creating greater value for all of our shareholders,” said AMD Chairman and chief executive Hector Ruiz.

AMD has been in a slump in recent quarters, and the investment is seen as a timely injection of capital to take to its ongoing battle with rival Intel. AMD has lost more than US$1.6 billion so far this year.

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EC charges Intel with competition breach

CHIP-making giant Intel has rejected European Commission charges that it engaged in anti-competitive practices, arguing that its market behaviour in Europe was both legal and in the interests on consumers.

The European Commission says Intel has engaged in monopoly abuse to lock its competitor AMD from accessing new customers. Intel has ten weeks to respond formally to the charges, which could ultimately lead to fines running to hundreds of millions of dollars.

The commission said Intel had given substantial rebates to PC manufacturers for buying their x86 processors and that the company paid the manufacturers to either delay or discontinue making products that used AMD processors.

It said Intel also made below cost bids for business in accounts where AMD was a competitor.

The commission said each of the three types of behaviour were both anti-competitive and against the law, but added the combination of the three showed an anti-competitive strategy that damaged both AMD and the market.

“The Commission also considers at this stage of its analysis that the three types of conduct reinforce each other and are part of a single overall anticompetitive strategy,” it said.

Intel senior vice-president and general counsel Bruce Sewell said the company rejected the charges and welcomed the chance to address them.

“We are confident that the microprocessor market segment is functioning normally and that Intel's conduct has been lawful, pro-competitive, and beneficial to consumers,” Mr Sewell said.

“While we would certainly have preferred to avoid the cost and inconvenience of establishing that our competitive conduct in Europe has been lawful, the Commission's decision to issue a Statement of Objections means that at last Intel will have the opportunity to hear and respond to the allegations made by our primary competitor,” he said.

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Intel Q2 profit surge

DESPITE its ongoing corporate restructure, chip-maker Intel second quarter profits have jumped 44 per cent to US$1.3 billion (A$1.5 billion), the company said.

Intel said revenue climbed to US$8.3 billion. The results included an US$82 million restructuring charge taken for the uarter.

“Intel's operational execution continued to strengthen, resulting in an outstanding product roadmap and solid year-over-year revenue growth,” Intel president and chief executive Paul Otellini said.

“We're pleased that our efforts to streamline the company are delivering profit growth in excess of revenue growth,’” he said.

And Intel said it expects continued strong growth in the third quarter on the back of a healthy global IT market. The company has forecast revenue growth to US$9 billion to US$9.6 billion, with gross margin up marginally to 52 per cent.

Intel has enjoyed strong sales growth for its quad-core Xeon server processors, but has suffered a slowdown at the low-end of the PC chip market through stiff price competition.

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Intel joins One Laptop Per Child initiative

THE world's largest processor manufacturer Intel has joined the One Laptop Per Child initiative, which seeks to bring low-cost computers to third world children as a means of improving education and fighting poverty.

Under the terms of an agreement signed last week, Intel and OLPC will explore collaborations involving technology and educational content.
Intel will also join the board of OLPC.

OLPC aims to bring learning opportunities to the most remote and poorest children of the world by providing connected, low-cost and rugged laptops to each and every child in their daily lives.
"Intel joins the OLPC board as a world leader in technology, helping reach the world's children. Collaboration with Intel means that the maximum number of laptops will reach children," said One Laptop per Child founder Nicholas Negroponte said.

One Laptop per Child (OLPC) was created to design, manufacture, and distribute laptops that are sufficiently inexpensive to provide every child in the world access to knowledge and modern forms of education.

The laptops will be sold to governments and issued to children by schools on a basis of one laptop per child. These machines will be rugged, Linux-based, and so energy efficient that hand-cranking alone will generate sufficient power for operation. Mesh networking will give many machines Internet access from one connection.

"Joining OLPC is a further example of our commitment to education over the last 20 years and our belief in the role of technology in bringing the opportunities of the 21st century to children around the world," Intel chief executive Paul Otellini said.

Intel currently invests more than US$100 million (A$114 million) per year in more than 50 countries to promote education, and has been developing products for the educational marketplace.

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Intel confirms $3.1b chip fab plant

INTEL chief executive Paul Otellini has confirmed the company will spend US$2.5 billion (A$3.1 billion), 300 millimetre wafer fabrication plant in China.

The investment in a plant called Fab 68 in the north eastern Chinese city of Dalian will become Intel’s first fab in Asia.

“China is our fastest-growing major market and we believe it's critical that we invest in markets that will provide for future growth to better serve our customers,” Mr Otellini said.

The Fab 68 plant is the first wafer fabrication facility the company has built at a new site in 15 years. The last time Intel broke ground for a fab at a new site was with the construction of Fab 10 in Ireland in 1992.

“Intel has been involved in China for more than 22 years and over that time we’ve invested in excess of $1.3 billion in assembly test facilities and research and development,” Mr Otellini said.

“This new investment will bring our total to just under $4 billion, making Intel one of the largest foreign investors in China.”

The company said construction on Fab 68 would begin later this year and production is expected to start in the first half of 2010. Initial production would be dedicated to chipsets to support Intel’s core microprocessor business.

Zhang Xiaoqiang, the vice chairman of the National Development and Reform Commission that approved Intel’s foreign investment said the development was one of the biggest cooperative development projects between China and the US in recent years.

“We support Intel's initiative to expand and strengthen cooperation with relevant parties in a number of areas, such as talent training, technology standards, improved information technology for rural areas and digital health, to promote the mutual benefit and win-win of Intel and the information industry of China, and to achieve the goal of growing together,” Mr Zhang said in a statement.

When completed, Fab 68 will become part of Intel's manufacturing network that includes eight 300mm factories in 2010 with other fabs located in the United States, Ireland and Israel.

Manufacturing with 300mm wafers dramatically increases the ability to produce semiconductors at a lower cost compared with more commonly used 200mm (eight-inch) wafers.

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Intel approval for $2.5b China chip plant

CHIP-maker Intel has been given approval from authorities to build a US$2.5 billion (A$3.2 billion) fabrication facility in China, local media reported.

China’s top economic planning agency, the National Development and Reform Commission (NDRC), said on its web site that the project to build a factory in Dalian had been approved.

Reports in the US said Intel had not yet announced its intention to build the plant and had declined to comment further.

The NDRC announcement said the Dalian Intel plant would use 90nm (nanometre) fabrication technology most commonly used in mass-production flash memory chips.

Current top of the line Intel manufacturing technology builds chips using 65nm technology, and the company will start production later this year in the US of microprocessors using 45nm technology.

Should Intel go ahead with the Dalian fabrication, the US$2.5 million investment would be one of the largest single foreign investments in the China market.

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VC firms tip US$1 billion into blade sector

JUST one year after it was set up, the open collaborative community driving innovation in blade-based systems,Blade.org, says its venture capital firms have tipped more than US$1 billion into companies developing emerging blade technologies.

The blade server market remains the industry’s fastest growing server segment and is expected to grow to reach $US11 billion by 2010.

From eight founding members a year ago, including IBM, Citrix, Brocade and Intel, Blade.org has grown to nearly 100 members, made up of hardware and software providers, developers, distributors and large end user customers.

The blade initiative started four years ago when IBM and Intel opened the architecture and specifications of the IBM BladeCenter system. More than 400 tech firms have now downloaded the specifications for free to begin to shape the future of the blade server platform.

Additionally, the need for the Blade.org community was identified by venture capital firms that recognized the opportunity for up and coming technology companies to play a critical role in the fast growing blade server market.

More than 50 global venture capital firms, including Walden International, Accel and Austin Ventures and many of Blade.org's member organizations, building support for the blade server architecture and spurring development based on open hardware standards.

"By providing an environment that sparks innovation among members, Blade.org is bringing new blade server applications and solutions to market more quickly, creating opportunity for the entire blade ecosystem," said US Venture Partners general partner David Liddle.

“Nearly half of the Blade.org ecosystem is made out of venture capital investments, and we believe this is expected to have significant impact on shaping up the future direction of this technology."

By combining storage, networking and servers, blade server systems simplify business computing for customers. The shape of each blade server is slim and, like a book, slides into a system like books on a shelf and carries its own processors, memory, storage, network controllers, operating system and applications. Each server also shares a mid- or backplane, which enables power, fans, floppy drives, switches, and ports to be shared.

The benefits of the blade approach include improved security, improved virtualisation, and massively reduced power and cooling demands for data centre managers.

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