Digital, Intel happy with end of saga

The burying of the hatchet between Digital and Intel seems to have been done with equanimity.

The firms both seem satisfied. Intel gets yet more fabrication capabilities while Digital gets $700 million cash and buys some future for its Alpha customers. And of course, the litigation is over.

"We have a commitment to Digital to manufacture Alpha as long as Digital requires it," said Pierre Mirjolet, product marketing manager at Intel Europe. "Digital retains the design of future Alpha products. We're getting a state-of-the-art factory, buying us additional capacity. Intel's committed to offer a job to Digital [staff at the plant] as Intel employees. I don't foresee any job cuts."

"A range of Intel products, chipsets and processors, could be produced [at the plant]," said Mirjolet, but added no decision has been made yet. However, he admitted the mobile Pentium MMX and next summer's 0.25-micron Pentium II chip Deschutes are in the running, as the factory runs on a 0.25-micron process.

The FTC is yet to approve the deal, which is likely to take between three and six months, said Mirjolet. Intel will then have to retool the plant to produce its own products.

"Digital has been trying to get rid of that operation [the Hudson, Massachussetts facility] for years," said Richard Baker, European marketing manager at rival chip maker AMD. "When we had capacity to make 486 processors at the Ayr, Scotland facility that Digital eventually sold to Motorola it took us about a year to turn around and get the process lined up. Intel, I doubt, would be able to make anything for a while. It gives Intel extra fabrication."

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