A pair of interesting legal turns have lead to a pair of interesting financial turns for the two giants of the computer graphics industry. First off, AMD published the quarterly report to wrap up 2009, and found themselves a surprise, they’re in the black for the first time in 13 quarters? How did this miracle happen? They got a big $1.25Billion from Intel for that legal settlement. But that’s not all:
To put things in perspective, last year AMD lost $1.4 billion just on Q4’08, and $3.1B for all of 2008, so this is a massive turnaround for the company. At this point both of their core divisions are turning a small profit, and the company’s reduced exposure to the foundry business has greatly improved their bottom line. AMD took a loss of $99M in Q4 from their share of Global Foundries – so if they were able to drop the foundry business entirely, they would have likely turned a true GAAP profit. Although AMD has several problems, at the moment it’s the foundry business that continues to be doing the most harm to them.
So while AMD is reveling in what will probably be a short-term gain (the Intel payment was a one-time event, afterall), NVidia is getting hammered on the other end of the legal spectrum. Just yesterday, a judge ruled that NVidia is in violation of some of those Rambus patents that have been haunting them for the last few years.
A judge with the U.S. International Trade Commission in Washington said today that Nvidia is violating three patents owned by Rambus. Two other patents are invalid, said Judge Theodore Essex. His decision, which is subject to review by the full commission, may result in a ban on imports of Nvidia chips and products that use them, including some computers made by Hewlett-Packard Co.
No doubt NVidia will settle or pay a fine to keep availability of product here in the States, which will lead to a huge hit on their financials for Q1 of 2010. Hopefully the Fermi and 3D Gaming will be big enough to offset the payout.
