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News > Deals
Intel, Digital settle lawsuit
October 27, 1997: 9:42 a.m. ET

Intel to buy DEC semiconductor operations, cross-license patents
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NEW YORK (CNNfn) - Digital Equipment Corp. said Monday it is selling its semiconductor manufacturing operations to Intel Corp. for about $700 million as part of a settlement of an ongoing patent dispute.
     In addition, the companies said they will cross-license patents for the next 10 years, use each other's microprocessors in their own systems and develop future systems based on Intel's 64-bit microprocessors.
     Intel also will acquire a semiconductor plant in Hudson, Mass., and development operations in Jerusalem and Austin, Texas.
     Digital will continue to develop its Alpha line of processors, which will be manufactured in Intel-owned factories. Some Digital semiconductor employees will shift to Intel as part of the settlement, although the exact number of employees affected wasn't disclosed.
     No other financial details were disclosed.
     The chiefs of both companies hailed the settlement as a mutually-beneficial agreement.
     "This agreement meets both companies' needs. We are pleased to get alignment with one of the world's major computer companies and to let the marketplace judge our work," said Craig Barnett, Intel's president and chief operating officer.
     "This agreement brings issues between the two companies to a resolution that benefits customers in many important ways. It ensures long-term availability of Digital's Alpha-based offerings...," said Digital Chairman Robert B. Palmer.
     Digital sued Intel in May, saying the design of the company's Pentium, Pentium Pro and Pentium II chips infringed on 10 of its patents.
     Two weeks later, Intel filed a suit of its own against Digital, alleging that DEC violated property rights by refusing to return certain documents as required by previous contracts.
     Both companies said they were putting all lawsuits on hold until U.S. officials approve the settlement.Back to top
     --From staff writer Cyrus Afzali

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