RE:<Gordon Moore was in control at the time and the agreement was terminated because Intel got tired of carrying a deadbeat partner. Who wouldn't?>
Ok, I'll take your word for that, I am not crystal clear on the date ranges of Intel's executive tenures. My main point was that Jerry and Grove were never friends. In fact, although many of us assume Jerry's off the wall comments such as "Intel is over" etc. are recent changes to his personality brought on by animosity toward Intel, it seems that it is really a product of uncontrolled egomania and lack of tact. Several instances of poor judgement in comments he made regarding Intel even prior to the termination of the second sourcing relationship are referred to in the book 'Inside Intel' and it could even be argued that his comments were so inflammatory as to contribute to Intel's desire to end the relationship.
As for dead weight, Intel and AMD had a technology-exchange agreement in place at the time, Now whether AMD's HDC and QPDM were good enough or not may be debateable but it is pretty clear from the quote below that Intel didn't care one way or the other, they were acting in bad faith and didn't want to take AMD's tech no matter how good it was.
From 'Inside Intel' by Tim Jackson
"The amendments to the deal, like the original agreement they modified, were handled on both sides without much involvement of the lawyers. The fine points were fixed between Dave House and Tony Holbrook, AMD's COO. Holbrook became worried that Intel's engineers might choose to reject the two parts. A week after the amended agreement had been signed, he called House to express his concerns. 'Don't worry Tony,' House replied 'I'll make them take [them]' The two parts were a hard disk controller, known as HDC for short, and a graphics chip called a quad-pixel display manager, or QPDM. Ten days later, House called Holbrook back. 'Remeber the HDC and QPDM?', he asked. 'We're not taking them.'
House's call provoked a fierce reaction inside AMD. One faction said that Intel was simply hard to please. With a history of distinguished innovation, and with a large dose of NIH, or not-invented-here syndrome, Intel was always likely to look down it's nose a little at other companies' parts. Intel could also claim, with some justice, that some of the parts AMD offered were too large to be manufactured cost effectively. AMD's job, said the proponents of this point of view, was to work as hard as possible in meeting Intel's demands for improvements and changes.
The other faction insisted that Intel wasn't playing fair. It seemed clear, it's members complained to Sanders, that the larger company was trying to stop the technology transfer deal from working. It was deliberately putting up obstacles. It was imposing impossible conditions. Intel was determined, they argued, to reject the HDC and QPDM and to force AMD to pay through the nose for access to the 286.
Sanders decided to proceed on the assumption that Intel was acting in good faith. He told AMD's technical people to work harder at getting the two parts in the shape that Intel wanted, and to keep coming back with amendments, no matter how troublesome and difficult the Intel engineers might be.
Sanders was wrong. He would not discover the evidence for several years, but Intel had definitively decided, while the amendment was being negotiated, that it wanted the whole technology sharing deal to collapse. A secret internal memo from one senior Intel official to another stated the company's strategy in two succinct bullet points:
* Assure AMD they are our primary source through regular management contact and formal meetings.
* Take no more AMD products under the current agreement.
Jerry Sanders had finally recieved his comeuppance for baiting Andy Grove. Intel had decided that it's position in the market was strengthening so fast that in it's very next chip generation -the 386- there would be no need for a second source at all." |
