Why AMD should never have made x86 processors in the first place

Another draft, this time create on June 22nd, 2016. The title may have been written down in a hurry, and seems a bit click-baity. I suppose it needs a bit of nuance: the point I wanted to make here is not about the early x86-CPUs that were made as a second source under license from Intel. It has to do with the CPUs from the 386 onwards, which AMD marketed under their own brand, and at least initially, without a license from Intel.

I’m not sure how many people would actually agree with the notion that AMD shouldn’t have made x86-based processors under their own brand. But it is interesting to see why and how AMD actually got to that point.

My draft contained the following links:


http://jolt.law.harvard.edu/digest/patent/intel-and-the-x86-architecture-a-legal-perspective (working archived link: http://web.archive.org/web/20170120173519/http://jolt.law.harvard.edu/digest/patent/intel-and-the-x86-architecture-a-legal-perspective)



In short, it is about the legal history between AMD and Intel. AMD and various other companies acted as a second-source for Intel chips, which meant that a license was in place between Intel and the second-source companies. Intel supplied the licensed designs to these companies, so they could build the Intel designs as-is, which meant that these second-source chips were 100% compatible and interchangeable with the Intel ones. This wasn’t necessarily Intel’s choice, but IBM insisted that if they were going to use Intel as a supplier for their PC product line, they wanted secondary sources, to rule out supply problems, if anything happens at Intel (imagine that… we have come to know Intel as ‘Chipzilla’, but back then apparently they were still a small and potentially unreliable source to the giant of that time, IBM).

But in the era of the 286, things started to change. On the one hand, IBM was losing its grip on the market, now that clones were flooding the market. Which meant that IBM could no longer put such demands on Intel, as Intel could in theory do without IBM as a client now. The market was big enough. So Intel wanted to get rid of the second-source deal. They did not provide designs for the new 386 CPU to second-source companies, and they did not renew the deal, so it would just run its course and that was that.

On the other hand, some second-source companies would not just stick to the designs provided by Intel. For example, NEC created the V20 and V30 CPUs, which were pin-compatible with the 8088 and 8086 respectively, but implemented the instructionset of the 80186, and had some performance-tweaks. Other companies would not go quite as far, but would still modify the designs to fine-tune the performance for their manufacturing, and allow higher clockspeeds. So eventually we would get 808x-like CPUs at 10-12 MHz, and the 286 was eventually pushed to 20 and even 25 MHz (by Harris, a company that has since left the mainstream CPU market).

So, if Intel didn’t provide AMD with the 386 designs, how did AMD build a 386 anyway? By reverse-engineering. And this is where AMD is starting to do dubious things, in a legal sense. AMD figured that the license deal SHOULD have given them access to the 386 design, and by that logic their reverse-engineering and cloning would not be illegal, as they had the rights to the IP anyway.

Clearly Intel did not agree with that, and sued AMD for their 386, which was based on Intel’s design, so technically it was an unlicensed copy. The AMD 386 was held up in court for many years. Intel released the 386 in October 1985, and AMD had their copy ready in 1990. By March 1991, the case was finally settled, and AMD could release their Am386 onto the market.

Now, people commonly think AMD won the case, meaning that Intel was in the wrong, and AMD actually *did* have the rights, according to the license. But if you actually read the outcome of the lawsuit, Intel was technically correct, and AMD technically infringed on the license. However, the judge ruled that x86 was too important for the market for Intel to have a monopoly on the instructionset. So Intel was forced to offer AMD a new cross-license agreement. As the Harvard article writes:

While the arbitrator found that Intel was not obligated to transfer every new product to AMD or accept any of AMD’s products, he also decided that Intel had breached an implied covenant of good faith to make the relationship work. Id. at 1013. But this legal strategy paid off for Intel. By refusing to give AMD a license to the 386 and leaving the issue tied up in a lengthy arbitration, Intel excluded AMD during a critical period of growth in the personal computer market, during which the PC platform’s market share grew from 55% in 1986 to 84% in 1990; leaving Apple’s Macintosh at a distant second place with just 6%. Without access to Intel’s technical specifications, AMD took over five years to reverse-engineer the 80386, which was substantially more complicated than and contained almost ten times as many transistors as the 8086.

So in essence, this is a more or less arbitrary decision, based on antitrust laws, rather than an enforcement of license terms. Technically speaking, the Am386 wasn’t legal, and Intel was right, legally. But it was *made* legal by the ruling. And that is unusual. If Intel wasn’t as big and successful as it was, it should just have been able to claim ownership, copyright and trademark on its 386, given that Intel was the sole designer and developer of the product, and had retained all rights. But as you can read, the fact that the x86 became so successful, and it was so difficult for AMD to reverse-engineer, was used against Intel, and in AMD’s favour.

Which is why I would say: AMD should never have made the Am386, from a legal standpoint. But they just bluffed their way through, and managed to crawl through the eye of the needle. I suppose sometimes crime does pay.

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12 Responses to Why AMD should never have made x86 processors in the first place

  1. nickysn says:

    “I suppose sometimes crime does pay.” <— Technically, a "crime" usually refers to a criminal and not a civil case. In a civil case, an individual or company sues another person because of a dispute. In such cases, the owner of the work may take the alleged offender to court to recover monetary losses. In a criminal case, it is the government that pursues the issue. That's because when a person commits a crime, they are violating laws enacted by the state or federal government. A person convicted in a criminal court can face incarceration and fines. So, no, what AMD did is not technically called a "crime".

    • Scali says:

      Reverse engineering of a CPU for commercial reproduction, as AMD did with the 386 and 486, is the crime I am referring to here.
      So I completely disagree with your, rather creative, framing of events.
      It’s a form of infringement of intellectual property, trade secrets and whatnot, and can indeed count as a (federal) crime: https://www.justice.gov/criminal-ccips/file/891011/download
      And no, a crime does not become a crime only after you are convicted of such. The crime is the act itself, regardless of whether or not you are caught, taken to court and found guilty.
      So I say the reverse engineering and copying of the 386 and 486 was a crime, on the basis that the judge ruled in favour of Intel on the license terms. These designs were not covered by the second-source license.

      • nickysn says:

        Reverse engineering is legal, so that’s not the problem: https://www.law.cornell.edu/wex/reverse_engineering
        The problem is patent infringement and copyright infringement, but these are generally civil court issues, not criminal court issues. You can’t and shouldn’t call someone accused of a civil offence, a “criminal”.

      • Scali says:

        Again, you are (deliberately) pulling ‘reverse engineering’ out of the rest of the context. Also, I said ‘crime’, not ‘criminal’.
        You disappoint me.
        One can respectfully disagree on my use of the common phrase “Crime does (not) pay”.
        Or, one can twist my words around into a strawman-fallacy, and complain about words I’ve never used, in a context they were never used in.

        “A crowbar was used to break and enter the premises”
        Your logic: “Using a crowbar is not a crime”

  2. Marv says:

    What is or isn’t “legal” has and will always have been determined by the courts. The courts didn’t reciprocate your view that the defendant in this case shouldn’t have infringed on the plaintiff’s IPs because it is solely their interpretation that they found the plaintiff to violate antitrust. Two wrongs did make a right or at least a “just” ruling by the courts in the end …

    • Scali says:

      Fine, ignore the actual quote from the Harvard article that specifically says that the arbitrator said this:

      While the arbitrator found that Intel was not obligated to transfer every new product to AMD or accept any of AMD’s products, he also decided that Intel had breached an implied covenant of good faith to make the relationship work

      In other words, if Intel was not “obligated to transfer every new product to AMD”, that means AMD didn’t have a license to copy the 386 and 486 under the agreement at the time. Because obviously Intel never specifically ‘transferred the products to AMD’, as in: gave them the license (and designs) for the 386 and 486, and the arbitrator says here that Intel was not obligated to do so by the terms of the agreement.
      This invalidates the claim that AMD made to the IP, namely that the agreement would have extended to the 386 and 486, and Intel would be in breach of the agreement because they refused to do so.
      As such, Intel was not in breach of the agreement by not making the 386 and 486 available, AMD did in fact not have the rights to a license of the IP, and as such, this infringes the Intel IP, and the 386 and 486 were unlicensed copies, as I said.

      It’s not ‘my view’, and you’re not arguing in good faith by presenting it as such.
      Whatever helps you sleep better at night, I guess.

      Unless you want to just make the meaningless claim that I paraphrased “AMD did not have a license to the 386 and 486 IP” (which is supported by what the arbitrator said, as explained above) with “AMD should not have made the 386 and 486”.
      To which I would clarify: AMD should not have made the 386 and 486 *under the circumstances at the time* (from a legal standpoint at least). They would have had to find a way to obtain the rights to the IP (which was unlikely, given that Intel wanted to take back full control over the x86), or work around it by not making direct copies of the CPU, but design and implement their x86-compatible CPUs in a way that they did not infringe the IP or copyright directly (which certain other manufacturers, such as Cyrix/Texas Instruments have done at that time).
      But that’s all theoretical, given that the outcome of the legal proceedings was that AMD obtained a new agreement that gave them a new license to the IP, as I already said.

      • Marv says:

        I think you’re getting a bit too contentious. I didn’t ignore the court’s findings, I said that they didn’t share the conclusion you were arguing upto as to why the defendant here should’ve never made x86 processors.

        “Which is why I would say: AMD should never have made the Am386, from a legal standpoint. But they just bluffed their way through, and managed to crawl through the eye of the needle. I suppose sometimes crime does pay.”

        The courts here clearly had a different idea as opposed to your stated conclusion that you seemingly share. The courts think that it’s just to make infringement legal in this outcome to balance out antitrust violation. Regardless if the defendant was found to infringe or not, what other means did the courts have to enforce antitrust against the plaintiff ? If you think that the courts “wrongfully” made this ruling, what do you think was another alternative besides solely just outright blocking the defendant from infringing ?

      • Scali says:

        You are repeating the same argument that I have already responded to. Clearly we don’t agree. I am not going to repeat myself, as you have not given any new insights as to why my previous position would not be correct.

        Also, your reading comprehension is failing you:
        “Which is why I would say”
        You are not properly separating the part where I base myself on what the arbitrator says from the part where I base my own conclusions/opinion on it.
        Not to mention that you seem to have trouble parsing the chronology of decisions, with cause and effect and such.
        I suggest you do not return.

      • Marv says:

        “I suggest you do not return.”

        Getting prickly here aren’t we ? I guess we’re going to have to agree to disagree and it matters not if my comprehension is failing me or if you are technically correct because the latter alone isn’t good enough for the justice system irrespective of what your belief is. It’d be easier for you to admit that you’d rather not have any discourse on this post …

      • Scali says:

        You are trying to have “””discourse””” in the manner of “your opinion is wrong because I don’t agree with it”. Nothing can come of this. You are trying to pull this into some deeper argument of what would be “good enough for the justice system”, which isn’t relevant to the article I wrote, or the points I put forward.
        It would be some kind of moral/ethical philosophical debate… which you should better not start with “your opinions are wrong”.
        Especially not if you later have to admit “well, technically you are correct and your logic is sound, it’s just that I take issue with the moral/ethical consequences”.

      • Marv says:

        “Nothing can come of this. You are trying to pull this into some deeper argument of what would be “good enough for the justice system”, which isn’t relevant to the article I wrote, or the points I put forward.”

        You’re probably right that nothing can come since this is the perfect place to vent a one-sided commentary.

        “It would be some kind of moral/ethical philosophical debate”

        What is legal (right) or not (wrong) was ALWAYS a moral/ethical/philosophical debate. There’s no separating “judgement” on a case/situation even if you base your interpretation purely on a technical basis because by passing judgement you ARE inherently entering in the realms of these sorts of debate whether you realize this or not.

      • Scali says:

        There’s a difference between being “one-sided” and commenters bringing up completely different topics than what I am willing to discuss, especially in the way they choose to discuss them (plenty of proof in the comment section of many articles on here. If someone brings up a valid criticism, I will addresss it, and I will update the article if required. And if someone wants to discuss something related, that is fine as well. Even if we don’t agree. But there are limits).

        And again, we disagree… What is legal is based on current laws. Whether or not you agree with the laws or a particular outcome or not, *that* can be a moral/ethical/philosophical debate. And the issue here is that I was discussing the former (specifically: did AMD actually have a license for the 386 and 486 or not, based on laws and the agreement with Intel), while you want to discuss the latter (you never specifically engaged with what I wrote in the article, nor with the step-by-step explanation of how you logically come from what the arbitrator says to my opinion/conclusion. So apparently you agree that the logic itself is valid. You just don’t like the opinion/conclusion. I can’t help you with that. I am entitled to my own opinions on my own blog, wouldn’t you agree? So there is no reason for me to adjust these, especially not if the logic underlying them is sound).

        Just look at your own previous post. You are clearly making a teleological argument.
        Whereas my article is more of a deontological nature, whether you realize it or not (the title alone is clearly a deontological statement, as I also tried to explain later, but you rejected that explanation for no good reason).

        So you are trying to pull an opinion piece of a deontological nature into a teleological discussion, and then you wonder why the author of that piece is not willing to engage you. And you then proceed to blame the author.
        If you had wanted such a discussion, it would have helped if you engaged it in a more constructive manner than you did. As it stands, I have absolutely no intention to have any sort of discussion with you on the subject. Primarily because you want to push your morals and views onto me in a rather aggressive manner. First impressions matter. My impression of you is that you are both obnoxious and a very sloppy thinker, who cannot properly separate things and argue what it is he actually wants to say.

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