Former Intel Employee Stealing Top Secret Documents

Story first appeared on CIO

A former Intel employee has pleaded guilty to stealing confidential documents from the company, according to court records.

The employee has pleaded guilty to five counts relating to the illegal download of confidential documents from Intel's servers, according to a plea agreement entered last week between the employee and the U.S. Attorney for the District of Massachusetts.  An Intellectual Property Lawyer in Boston has been following the case.

An employee of Intel's Massachusetts Microprocessor Development Center, working on the design of Itanium processors, is said to have resigned from Intel on May 29, 2008, and took leave from Intel up to June 11, purportedly to use accrued vacation time.

The employee, however joined Intel's rival Advanced Micro Devices on June 2, while still on Intel's payroll, and continuing to have access to Intel's servers. He returned to Intel on June 11 for an exit interview on what was to be his last day at Intel, according to his indictment in 2008.

From June 8 through June 11, the employee downloaded 13 "top secret" Intel design documents from the company's servers in California, according to the indictment. He copied them from his Intel-issued laptop to an external drive to have access to the documents after he returned the laptop to Intel. He is said to have tried to access the servers again around June 13 after he found that he could not access the documents offline because he had not completed the procedure required for viewing the encrypted documents offline.

AMD neither requested the information that had been downloaded and kept from Intel, nor knew that the employee had taken or would take the information, according to the indictment. The employee is said to have downloaded the documents to further his career at AMD or someplace else when the opportunity arose.  A Boston Copyright Lawyer states that this not only falls under Intellectual Property Law but could also be violating Copyright Laws.

In the filing before the U.S. District Court for the District of Massachusetts last week, the U.S. Attorney recommended six years of incarceration to the court, instead of the maximum of 20 years on each count, because among other things the government has no evidence that he used, sold, transferred, or offered the proprietary information, or any direct evidence of specifically how he intended to use the information.

For more technology related news, visit the Electronics America blog.
For more law related news, visit the Nation of Law blog.

AMD Chief Fights for Credibility in Intel Showdown

Bloomberg

For Chief Executive Officer Dirk Meyer, Advanced Micro Devices Inc.’s new lineup of chips is more than an effort to win back customers lost to Intel Corp. It’s a bid for credibility.

After four years of production delays, slumping sales and shrinking market share, Meyer says he wants to convince customers and investors that AMD can consistently deliver quality products and challenge its dominant competitor. The first test comes with its new Fusion chips, built with graphics capabilities that AMD says Intel can’t easily match.

Fusion also provides a chance to redeem AMD’s 2006 acquisition of ATI Technologies Inc., a $5.4 billion purchase that threatened to sink the company with debt. By combining its processors with ATI’s graphics chips, AMD aims to get a payback on the deal. Another part of the comeback plan: AMD spun off its factories in 2008, freeing up cash to focus on innovation.

“You gain credibility out of executing successfully over quarters and years,” Meyer, 48, said in an interview at the company’s Sunnyvale, California, headquarters. “We haven’t been doing it for years yet.”

AMD, which was founded a year after Intel, has spent 40 years in the shadow of its rival, the world’s largest chipmaker. AMD has less than 20 percent of the global personal-computer processor market, compared with Intel’s 80 percent, and its revenue last year of $5.4 billion was a seventh of Intel’s.

Fusion Release

AMD began shipments today of its first Fusion product, which puts processors and graphics chips onto one piece of silicon. Computers based on the product will go on sale in early 2011. That will coincide with a new design from Intel, called Sandy Bridge, which also beefs up graphics features.

AMD’s last big hit was a server processor called Opteron that over three years grabbed 20 percentage points of market share from Intel. Opteron, introduced in 2003, also helped AMD squeeze more profit from each chip. In 2005, AMD’s products began to approach Intel’s famously high gross margins, which run as high as 67 percent.

That’s when AMD’s fortunes reversed. Opteron’s successor, Barcelona, was late to the market and needed to be redesigned. That failure was partly because AMD wasn’t ready for the big time, Meyer said.

Meyer is familiar with both companies. He worked at Intel in the 1980s, then spent almost a decade at Digital Equipment Corp., a computer maker acquired by Compaq Computer Corp., which is now part of Hewlett-Packard Co. When Meyer arrived at AMD in 1995, he led the team that designed its flagship processor.

Focus on Execution

Meyer comes from a technical background. He earned a degree in computer engineering from the University of Illinois and got an MBA from Boston University. After rising through the executive ranks at AMD, he replaced Hector Ruiz as CEO in 2008.

So far, AMD has struggled to follow through on its innovations, said Josh Spencer, a portfolio manager at T. Rowe Price Group Inc. in Baltimore.

“Where they’ve always fallen down in the past has been execution,” said Spencer, whose firm owns AMD shares as part of the more than $400 billion it has under management. With Fusion, “they have a chance to compete with Intel.”

AMD now has more than one engineering team capable of delivering multiple chip designs on time, Meyer said. That’s possible because it no longer has the distraction of running multibillion-dollar chip plants, known as fabs. AMD spun those off into a new venture called Globalfoundries Inc., backed by the government of Abu Dhabi.

‘Deep Hole’

The $8.4 billion transaction in 2008 helped reduce AMD’s debt from $5.5 billion in 2007 to about $2.2 billion now. It also let the company cut capital spending to about 10 percent of what it was three years ago, according to Chief Financial Officer Thomas Seifert.

Profitability will continue to improve. Today, Seifert predicted gross margin, the percentage of sales remaining after deducting production costs, will be between 44 percent and 48 percent in 2011. A year ago, he predicted a 40 percent to 45 percent range for 2010. AMD will be able to achieve a margin of above 50 percent in the long term, he said today during a presentation at the company’s headquarters.

“They were coming out of a deep hole,” T. Rowe’s Spencer said. “I’m impressed by what they’ve done.”

‘Critical Mass’

The moves haven’t reignited investor interest in the stock. The shares have declined 18 percent this year, and they’re trading at a fraction of their $42 price in 2006. Intel shares have climbed 3.7 percent this year.

AMD fell 23 cents to $7.91 at 4 p.m. in New York Stock Exchange composite trading. Intel lost 7 cents to $21.16.

“A company that’s up against some huge odds managed to stay in it,” said Alex Gauna, an analyst at JMP Securities LLC in San Francisco. “The question is: Will they get more interesting? I’m not anticipating they’re going to be a disruptive force.”

Rick Bergman, AMD’s senior vice president of products, disagrees.

“The No. 1 thing we have to do is have a differentiated product,” said Bergman, who joined AMD with Markham, Ontario- based ATI in 2006. In the past, “AMD didn’t have the critical mass, got bogged down in running fabs, and now we’re free from that burden.”

The difference between the new chips, according to Bergman, is that AMD will have state-of-the-art graphics, worthy of the most advanced computer games. Intel’s Sandy Bridge chip is years away from being able to handle that, he said.

“It just can’t do certain things,” Bergman said. “Would you want to buy a notebook and know from day one it has three-or four-year-old graphics technology?”

Single Chip

Intel says its Sandy Bridge chip represents a significant advance in graphics. “The overall performance and graphics capabilities of the Sandy Bridge processor are outstanding and represent a major step forward,” said Tom Beermann, a spokesman for Santa Clara, California-based Intel.

Both Fusion and Sandy Bridge combine two of the key components of a computer onto one chip. That reduces battery drain and speeds up processing by letting computers better share memory. Until now, advanced graphics chips have mainly gone into add-on computer boards. Those products are popular with gamers, who use them to get more realistic visuals.

AMD is counting on more than gamers to help Fusion catch on. New versions of programs for surfing the Web, including Microsoft Corp.’s Internet Explorer, could take advantage of the graphics features as well, the company says.

If AMD is right, computer users will get faster browsing, higher-definition video from programs like Adobe Systems Inc.’s Flash, and home movies that can remove the jerks and swings from handheld cameras.

Before AMD’s vision for Fusion can take hold, the company needs to keep delivering chips on time and find ways to be more nimble than Intel, Meyer said.

“As a small company, we’ve got to always look for ways to answer the question, ‘What’s better, what’s different about AMD?’” he said. “I can’t rely on having home runs.”

New Chips From Intel Show Lead Over AMD

AP

Intel Corp. rolled out new computer chips Thursday that highlight the company's lead over Advanced Micro Devices Inc. in its ability to shrink the circuitry inside its processors.

Intel's new Core chips, unveiled at the International Consumer Electronics Show in Las Vegas, are the company's first to feature tiny parts whose average width is 32 nanometers, or 32 billionths of a meter.

The transistors - little on/off switches that regulate the flow of electric current - are so small on those chips that 60 million could fit onto the head of the pin. That's twice the number that could fit into the same space in the previous generation of chips.

While the changes might be invisible to the naked eye, consumers experience the effects in the form of better performance and lower computer prices. Chip makers benefit from the ability to add more features and cut costs.

AMD's 32-nanometer chips won't appear in personal computers until 2011. It has argued that circuitry size isn't as important as performance and graphics.

The race between Intel and AMD is significant because essentially all modern personal computers are built with microprocessors, the "brains" of PCs, made by either Intel or AMD.

In recent years, AMD has made its focus the graphical performance of its chips, which the company says is important as computers render more gaming images and high-definition video. To that end, AMD paid $5.6 billion in 2006 to buy ATI Technologies to become a player in high-end graphics, a market Intel has struggled to break into despite repeated attempts.

Last month, Intel, based in Santa Clara, Calif., scrapped plans for a new graphics chip that would have directly challenged AMD's ATI division and another graphics heavyweight, Nvidia Corp. Intel blamed delays in its silicon and software development.

Meanwhile, Intel has been branching out from its core business into ancillary markets such as "netbooks" - stripped-down laptops used primarily for surfing the Internet - and now mobile phones, another market it previously tried to crack. Mobile phones use chips that generally do less than Intel's processors, but also suck up less power.

On Thursday, Intel CEO Paul Otellini showed off a new smartphone from LG Electronics Inc. that was built on Intel chips and is expected to go on sale in the second half of this year. It is the first phone with a processor from the same family of chips that Intel sells for netbooks.

With a 4.8-inch screen, LG's GW990 phone is bigger than standard smartphones. Apple Inc.'s iPhone has a 3.5-inch screen and Motorola Inc.'s Droid has a 3.7-inch screen - essentially the upper limit for smart phones in the U.S. LG hasn't said where the phone will be marketed.

The additional processing power can be used for things like videoconferencing and playing high-definition video on desktops.

"I can see a five-inch screen really becoming popular," Otellini said in an interview.

Intel's earlier stab at mobile phones ended in 2006 with the sale of its communications chip division to Marvell Technology Group Ltd. for $600 million. At the time, Intel's finances were suffering because of competition from AMD and it was shedding underperforming business units so it could focus on its core business: selling chips for personal computers and servers.

AMD To Introduce New Chips In Early 2010

Mercury News

Advanced Micro Devices, aiming to leapfrog Intel in computer-processor technology, will release sample versions of new products next year.

The company will provide test versions of its Bulldozer and Bobcat chips to manufacturers of computers early in 2010, Senior Vice President Rick Bergman said Wednesday in a presentation at AMD headquarters in Sunnyvale. That should give customers enough time to prepare for product releases at the end of the year, he said.

AMD is developing so-called Fusion products — a combination of processor and graphics chips — in an effort to create something that Intel can't match. AMD has fallen behind its rival in bringing out new technology, contributing to 12 straight quarterly losses. Intel had an 82 percent share of the market for personal-computer processors at the end of the third quarter, according to Mercury Research in Cave Creek, Ariz. AMD had 18 percent.

"We're going to deliver these solutions out there, and we're going to win," Bergman said.

AMD shares rose 18 cents, or 3.5 percent, to $5.32 Wednesday. The stock has more than doubled this year.

Chief Financial Officer Thomas Seifert said his top priority is to reduce the company's $3.67 billion of bond debt, which comes due for repayment in 2012 and 2015. Seifert, a former Qimonda executive who joined AMD in October, said raising money using stock is not attractive, though other options will develop as the market improves.

NY Attorney General Hits Intel With Antitrust Suit

AP

New York's attorney general hit Intel Corp. with an antitrust lawsuit Wednesday, claiming the company used "illegal threats and collusion" to dominate the market for computer microprocessors.

Following a similar case in Europe, Attorney General Andrew Cuomo claimed that the world's biggest computer chip maker paid billions of dollars in kickbacks to computer manufacturers and retaliated against those that did too much business with Intel's competitors, namely Advanced Micro Devices Inc.

Intel used its market prowess to "rule with an iron fist," Cuomo said.

"Rather than compete fairly, Intel used bribery and coercion to maintain a stranglehold on the market," Cuomo said in a written statement. "Intel's actions not only unfairly restricted potential competitors, but also hurt average consumers who were robbed of better products and lower prices."

An Intel spokesman, Chuck Mulloy, denied the charges and said the company's sales practices were legitimate.

"We never threatened anyone," he said.

The lawsuit, filed in U.S. District Court in Wilmington, Del., is the latest in a string targeting Intel's practice of paying large annual rebates to big customers.

Intel has described the rebates as simple volume discounts, but some regulators have disagreed. The European Union fined the company $1.45 billion in May, a decision Intel is appealing to EU courts.

Intel's closest competitor, AMD, sued Intel in the same court four years ago, accusing it of anticompetitive behavior. Cuomo's lawsuit mirrors many of the allegations in AMD's case, which is scheduled to go to trial in a few months. Cuomo said Intel's rebates were illegally designed to squash competition.

Computer maker Dell Inc. alone was paid almost $2 billion in such rebates in 2006, the state said, in exchange for an agreement not to market products from AMD.

Cuomo said Intel also resorted to "bullying" customers that didn't play along. Among other things, he said, Intel would threaten to end joint development ventures, and instead direct funding to a manufacturer's competitors.

The lawsuit said the fear felt by Intel's customers was revealed in internal e-mails, including one from an IBM Corp. executive who wondered in 2005 whether the company would risk too much by strengthening its business ties to AMD.

"Can we afford to accept the wrath of Intel?" he wrote, according to the lawsuit.

Another Dell executive worried that Intel's chairman and CEO would wage "jihad" against the computer maker if it did more business with AMD.

AMD's lawsuit quotes managers from Toshiba saying Intel's financial incentives amounted to "cocaine," and executives from Gateway complaining that Intel's threats of retaliation for working with AMD beat them "into guacamole."

Intel denies that it improperly pressured Dell or any other manufacturer of refurbished laptops or cheap desktops.

"We disagree with the New York attorney general," Mulloy said. "Neither consumers, who have consistently benefited form lower prices and increased innovation, nor justice, are being served by the decision to file a case now. Intel will defend itself."

Intel, which has its headquarters in Santa Clara, Calif., owns about 80 percent of the worldwide microprocessor market for cheap laptops and cheap notebooks, while AMD in nearby Sunnyvale essentially has the rest. Technical missteps by AMD and the company's deep financial problems have contributed to some of its challenges, but the company claims Intel's illegal tactics have hindered its progress as well.

AMD Introduces New Server Chip For Data Centers

Story from Wall Street & Technology

Just in time for Earth Day, AMD is introducing its Opteron EE chip, intended for companies that have large, power-constrained data centers.

"The financial services customers we work with were among the major contributors of feedback that resulted in the development of this processor, especially New York City financial services customers who have limited power availability," Gina Longoria, senior product manager in the server and workstation division at AMD. "They really need to watch their power consumption, which makes power-efficient computing very important to them." She says many New York City customers are adding facilities staff as a part of their IT decision-making team because the need to stay within a power envelope has become so critical.

The quad-core Opteron EE chip draws an average of 40 watts of power. It runs at 2.1 and 2.3 GHz speeds and includes the virtualization and power management features of other Opteron chips, including Smart Fetch, Power Cap and CoolCore. Smart Fetch lets IT managers move data in inactive cores to L3 caches that draw less power. The Power Cap feature lets IT managers set limits on server processor power consumption based on known workload peaks and valleys.The CoolCore feature lets managers turn off the memory controller and L3 cache when they're not needed.

The new chip is capable of uniquely services colocation centers in many major U.S. markets, including:

Atlanta Colocation
Chicago Colocation
Los Angeles Colocation
New York Colocation

Independent consultant Neal Nelson says he recently ran a benchmark test pitting a server loaded with AMD Opteron HE processors against a server running Intel Xeon low-power chips. He says the AMD processors used 13 to 21 percent less power while delivering better throughput than Intel's. Presumably, the lower-wattage EE version of the Opteron would fare even better in such a test.

Longoria says all of AMD's OEM partners have expressed interest in this new processor. She expects the Opteron EE to used in custom solutions for large data centers.