“We’re extremely pleased to have Doug join the Intel team,” said Intel CEO Paul Otellini. “His breadth of experience and legal expertise combined with his background in government are an outstanding fit for us.”

Melamed’s appointment must be quite a relief for Otellini and Intel, which, as I’ve noted here before, is grappling with some of the most important legal issues the company has ever faced.

Good day everyone … and thank you for joining us. For the past few years, we have been very open in outlining the major steps for AMD’s transformation into a processing powerhouse:

• From the acquisition of ATI Technologies;
• To the formation of GLOBALFOUNDRIES; and
• The creation of AMD-The Product Company,
  o with a single business unit,
  o a reinvigorated roadmap,
  o a new business model,
  o And a close relationship with a world-class leading-
  edge foundry.

Today, I am pleased to announce the last major component of that transformation–in the form of a transparent and public agreement with Intel to create a level playing field in the x86 processor industry–taking us one big step closer to achieving our bold vision.
There are three key components to the agreement:

• First, Intel has agreed to an important set of ground rules that we hope will define the path to a free and open market in the microprocessor industry;
• Second, we have agreed to a new patent cross-license agreement that gives AMD broad rights and the freedom to operate a business utilizing multiple foundries,
• And third, GLOBALFOUNDRIES has agreed to terms that allow them the freedom to operate as an independent world-class leading-edge foundry company, going forward, without being a subsidiary of AMD.

In addition, Intel has agreed to pay AMD $1.25 billion.

Today marks the beginning of a new era… one that confirms that the game has changed for AMD. It is an important milestone for us, for our customers, our partners, and most important–for consumers and businesses worldwide. In addition, it represents the culmination many years of litigation and regulatory engagement.

And we are optimistic that it will usher a new era for our industry. We recognize that it will take time for people to understand how operating conditions in the processor business have changed–but make no mistake–they have changed.

I would like to thank the regulatory agencies around the world for their diligence and consistency. Their work has enabled us to achieve this milestone. We are optimistic they will continue their vigilance in maintaining a level playing field, especially with respect to exclusionary practices in our industry.

Looking forward to three keys to our continued success: Compelling offerings; Access to customers and channels, And a winning business model.

We are optimistic this agreement addresses concerns about customer and channel access and our business model. We look forward to healthy competition with the mutual respect one would expect between world-class competitors.

Under terms of the agreement, Intel (INTC) will pay AMD (AMD) $1.25 billion (nearly a quarter of AMD’s $4.46 billion market cap) and agree to “abide by a set of business practice provisions” presumably crafted to temper Intel’s allegedly anticompetitive practices. Here are details of the agreement:

Business Practices Provisions Prohibit Intel From:

• Offering inducements to customers in exchange for their agreement to buy all of their microprocessor needs from Intel, whether on a geographic, market segment, or any other basis (Section 2.1.1.a)
• Offering inducements to customers in exchange for their agreement to limit or delay their purchase of microprocessors from AMD, whether on a geographic, market segment, or any other basis (Section 2.1.1.b)
• Offering inducements to customers in exchange for their agreement to limit their engagement with AMD or their promotion or distribution of products containing AMD microprocessors, whether on a geographic, channel, market segment, or any other basis (Section 2.1.2a-b)
• Offering inducements to customers in exchange for their agreement to abstain from or delay their participation in AMD product launches, announcements, advertising, or other promotional activities (Section 2.1.2.b)
• Offering inducements to customers or others to delay or forebear in the development or release of computer systems or platforms containing AMD microprocessors, whether on a geographic, market segment, or any other basis (Section 2.2.2 and 2.1.2)
• Offering inducements to retailers or distributors to limit or delay their purchase or distribution of computer systems or platforms containing AMD microprocessors, whether on a geographic, market segment, or any other basis (Section 2.2.1)
• Withholding any benefit or threatening retaliation against anyone for their refusal to enter into a prohibited arrangement such as the ones listed above.

In return, AMD will drop all its pending litigation against the company and pull out of regulatory complaints worldwide. Finally, the two rivals will enter into a five-year patent cross-licensing agreement.

In a joint statement, the companies said, “While the relationship between the two companies has been difficult in the past, this agreement ends the legal disputes and enables the companies to focus all of our efforts on product innovation and development.”

Interesting. Clearly, AMD CEO Dirk Meyer’s earlier comments about the ratification of its complaints about Intel’s business practices and the company’s hope for a future in which AMD’s “ability to succeed as a business is really determined by the quality of our products and customer relationships” was quite prefigurative.

During a call to discuss the settlement, Meyer said the accord marks the beginning of a new era, one that changes the game for AMD. “It is an important milestone for us, for our customers, our partners, and most importantly–for consumers and businesses worldwide,” Meyer said.

“It is the culmination years of litigation and regulatory engagement, and we are optimistic that it will usher a new era for our industry,” the CEO continued, further noting that change may not be immediate. “We recognize that it will take time for people to understand how the operating conditions in processor business have changed–but make no mistake–they have changed….We look forward to healthy competition with the mutual respect one would expect between world-class competitors.”

It is unclear if the settlement will affect the antitrust suit brought against Intel by New York Attorney General Andrew Cuomo last week as Cuomo hasn’t yet commented. But the European Union says it will not change its decision in May to fine Intel a record $1.5 billion for anticompetitive behavior.

“The European Commission takes note that Intel and AMD have settled all their litigation and that Intel is paying AMD compensation of one-and-quarter billion dollars,” said an EC spokesman. “But Intel has an ongoing obligation to comply with the commission’s antitrust decision and with EU competition law. The commission continues to vigorously monitor Intel’s compliance with its obligations under the EU antitrust decision.”

In remarks made during AMD Financial Analyst Day, CEO Dirk Meyer said that Intel’s (INTC) current legal woes “ratify” AMD’s (AMD) allegations.

“We’ve said for a long time that our success in the marketplace was hampered by anticompetitive behavior on the part of Intel,” Meyer said. “And over the last 12 months that we’ve seen our statements ratified by regulators around the world….I’m looking forward to a future in which our ability to succeed as a business is really determined by the quality of our products and customer relationships. And I can tell you that hasn’t always been true.”

“After Gateway’s 2004 merger with eMachines, AMD attempted to revive the relationship it had enjoyed with Gateway until 2001, but experienced extremely limited success. While Gateway built one AMD-powered desktop model at the request of Circuit City, AMD remains locked out entirely of Gateway’s direct internet sales, its commercial offerings and its server line. According to Gateway executives, their Company has paid a high price for even its limited AMD dealings. They claim that Intel has beaten them into ‘guacamole’ in retaliation.”

– Excerpt from AMD’s 2005 complaint against Intel

Looks like it’s going to be a very busy fall for Intel legal. This morning, New York Attorney General Andrew Cuomo filed a federal antitrust lawsuit against the company, alleging that it violated state and federal laws with a “systematic campaign” of illegal conduct to maintain its monopoly.

At issue here, once again, is Intel’s alleged practice of using bribery and coercion to maintain its monopoly, something rival AMD complained about in its own antitrust suit against Intel (INTC) in 2005.

AMD (AMD) alleged, for example, that in 2000, Michael Capellas, then chief executive of Compaq Computer, told AMD that because of Compaq’s relationship with AMD, Intel withheld the delivery of some microprocessors he needed for servers. Capellas told AMD he would stop buying from it, saying he “had a gun to his head.”

Further, in 2004, Gateway officials are alleged to have told AMD that Intel “beat them into guacamole” in retaliation for their limited dealings with its rival. These are but two incidents in a list that includes similar alleged acts of coercion by Intel involving 38 other computer makers, distributors and retailers.

Apparently, Cuomo has found evidence of similar behavior. “Rather than compete fairly, Intel used bribery and coercion to maintain a stranglehold on the market,” Cuomo said in a statement. “Intel’s actions not only unfairly restricted potential competitors, but also hurt average consumers who were robbed of better products and lower prices.”

Kara and the Boomtown blog were in New York this week and started the party early with Bob Pittman–well known media and Web exec. Kara wasn’t dancing on the tables, but did admit that Pittman’s new venture, a top-shelf tequila, was plenty tasty. BoomTown went straight from the sauce to the nose candy in a short interview with Ford’s (F) social media guru, Scott Monty. While Monty might have been using cocaine as a metaphor for a new kind of marketing that changes consumption of all other marketing, Weekend Update gets his subtext. As if BoomTown didn’t have enough hardcore “cred,” Kara headed off to fabulous Las Vegas for the annual meeting of the blogs at BlogWorld. Nothing that happens in Vegas this weekend will stay there–not with thousands of bloggers roaming the Strip in search of a new meme to latch on to.

Digital Daily trapped a Snow Leopard early in the week. John reported on Apple’s (APPL) admission that the Snow Leopard version of OS X occasionally overdelivers on its promise to free-up disk space. In certain circumstances, the furry filcher can sneak in and make off with all your user data. If it was data loss you were looking for though, no one beats the good folks at Danger who, up until recently, housed all kinds of personal data associated with the Sidekick line of smart phones. The Microsoft (MSFT) subsidiary permanently lost contact, calendar and other personal data associated with many accounts. Weekend Update thinks that Sidekick users were given fair warning, though; the company name is, after all, Danger. John rounded out the week with something unusual–good economic news from the tech sector: Intel (INTC), Google (GOOG), IBM (IBM) and AMD (AMD) were all feeling a little more flush than their prognosticators had predicted, each beating their admittedly dismal forecasts by at least a little.

MediaMemo followed up on some important stories, beginning the week with Twitter’s spam problem. Peter reported that the Web’s biggest microblogging pipeline updated its tools for trapping the flotsam and jetsam. Twitter is reportedly in talks with several leading search engines that want to feed on all that delicious real-time data. Peter also updated the readers on the tough times over at Condé Nast. This round of cuts was a little closer to the magazine publisher’s crown jewels than last week’s cuts and closings, with the layoff of at least six staffers from Vogue. Peter closed out the week with a cheeky little open letter to the Federal Trade Commission. He asked some important questions regarding the FTC’s recent obsession with bloggers and disclosure. He seems to think that most serious bloggers don’t like to sell their credibility for tiny discounts to obscure events.

Walt and Katie were all over Windows 7 this week, with help on all fronts for those making “the switch.” Before he got to that, though, Walt spent some personal tech time with some supersmart phones. He elevated Motorola’s (MOT) CLIQ and RIM’s (RIMM) BlackBerry Storm2 to the level of potential iPhone killer and praised their updated features and power as mobile computers rather than simply phones. Mossberg’s Mailbox heralded the beginning of the Windows 7 flood and was chock full of questions about upgrading and replacing some of the functionality that was built into Vista. The Great One also offered thoughts on installing Windows 7 on a virtual machine running in OS X, but couldn’t speak to the boot camp option until Apple releases more info…and the proper drivers.

Katie tested PC Mover from LapLink as an all-in-one option for moving precious data to Windows 7. While she praised the $15 program’s efficiency, she thought it was a little sleazy that it also tried to get her to purchase other programs while it had her data in its clutches. All went well, and the moral of the story is that this one-trick pony upgrade assistant was worth the minimal price tag.

Breaking News: Weekend Update is getting intermittent reports that Kara may have been kidnapped from BlogWorld by a roving band of mommybloggers in white robes, all slowly chanting “mon-eh-tize” as they piled into their Honda minivans. They may or may not have sealed her into a 30 foot-wide, saucer-shaped balloon, which could be floating westward toward the Bay Area.

If we get her back, you can look forward to another fully staffed, fully loaded week at AllThingsD.

Analysts had expected AMD to lose 42 cents a share on revenue of $1.26 billion, according to a consensus survey by Thomson Reuters. Instead, the company lost 18 cents a share on revenue of $1.4 billion, which was down from $1.8 billion for the same quarter last year.

Not the sort of blow-out quarter we saw from Intel (INTC) earlier this week, but encouraging news nonetheless. Certainly, AMD’s leadership believes the company is poised for a turnaround. During a conference call to discuss AMD’s (AMD) third-quarter results, CEO Dirk Meyer offered an upbeat outlook for the remainder of 2009 despite the current loss.

“Third quarter consumer PC demand continued to improve from prior periods, with particular strength in notebooks and in China and continued recovery in Europe and in North America,” Meyer said. “And it appears the commercial IT markets are positioned to improve next year….Going forward, we believe we are well positioned to succeed.”

“There have been some suggestions that the decision was based on allegations and not facts,” said Jonathan Todd, a commission spokesman. “With the publication of this decision, you can see precisely the details of the facts and how Intel broke the law.”

Below, a few of those details:

From a series of 2006 Lenovo e-mails:
“As you know I have been negotiating a special deal with Intel. The net is that Intel has made us a very attractive offer that we will end up taking. Our part of this deal is that we will award all business of shipments for the rest of this calendar year to Intel. In exchange, Intel will give us a special deal for both [geographical area] and [geographical area]. The deal is worth millions of dollars.”

“[two Lenovo executives] had a dinner with [an Intel executive] tonight (…). […] When we asked Intel what level of support we will get on NB [notebook] in next quarter, [he] told us (…) the deal is base[d] [sic] on our assumption to not launch AMD NB [notebook] platform. (…) Intel deal will not allow us to launch AMD.”

From a 2002 HP e-mail concerning the company’s negotiation of a rebate agreement with Intel:
“PLEASE DO NOT… communicate to the regions, your team members or AMD that we are constrained to 5 percent AMD by pursuing the Intel agreement.”

From a 2004 HP e-mail:
“You can NOT use the commercial AMD line in the channel in any country, it must be done direct. “If you do and we get caught (and we will) the Intel moneys (each month) is gone (they would terminate the deal). The risk is too high.”

From a 2004 Dell e-mail:
“[Intel senior executives] are prepared for [all-out war] if Dell joins the AMD exodus. We get ZERO MCP for at least one quarter while Intel ‘investigates the details’ (…) We’ll also have to bite and scratch to even hold 50%, including a commitment to NOT ship in Corporate. If we go in Opti [Optiplex corporate desktop line], they cut it to <20% and use the added MCP to compete against us" and "It looks 100% certain that Intel will take MCP to ZERO for at least one quarter while they 'review all of the numbers and implications.' (...) Appears likely that Intel would take MCP to <25% of current levels UNLESS we agree up front not to ship into [Product line]. If we do that, we're in 'détente' mode and can keep MPC [sic] at 50%. However, we don't meet [AMD Senior Executive]'s T&Cs [Terms and Conditions]. So, I would plan on MCP at <20% levels if we execute AMD across [Product line]and [Product line] as AMD wants."

Sounds pretty damning, no? Well, Intel doesn’t think so. In a hastily issued response, the company dismissed the EC’s release of the documents saying, “there’s nothing new here.”

“This Decision reflects the underlying bias we have come to expect from the case team that ran this investigation,” Intel said. “The Commission relied heavily on speculation found in e-mails from lower level employees that did not participate in the negotiation of the relevant agreements. At the same time, they ignored or minimized hard evidence of what actually happened, including highly authoritative documents, written declarations and testimony given under oath by senior individuals who negotiated the transactions at issue.”

Which is interesting since Sewell has been quarterbacking Intel’s (INTC) fight against antitrust allegations at home and abroad since, well, since they were first brought against the company in Japan. And Korea. And the United States, and now the European Union as well.

So to hear he’s leaving today after 14 years with the company with no explanation of why or where he’s headed…

to hear there’s no one lined up to take his place (Suzan Miller, currently deputy general counsel, will become interim general counsel until a replacement is found)…

and to hear this at a time when the company is grappling with some of the most important legal issues it’s ever faced…

when the U.S. Federal Trade Commission and the European Commission are both probing Intel’s alleged antitrust violations in the microprocessor market…

when the company is just six months away from going to trial with rival chip maker AMD (AMD), which accuses Intel of using illegal inducements to dissuade OEMs from buying AMD processors and “knee-capping” those who did….

Well, it’s all a bit odd, isn’t it?

I mean Sewell’s Intel bio is already returning “Page Not Found” errors (see below; click image to enlarge).

What’s going on in Intel legal? Reached for comment, the company didn’t have much of an answer to the question other than to say that Sewell is leaving of his own accord and it’s sad to see him go. “All I can say is that Bruce has decided voluntarily to leave the company,” Intel spokesman Chuck Molloy told me. “We are not talking about his plans. He was not forced to leave and we were surprised by his decision.”

UPDATE: Sewell’s leaving Intel to become General Counsel at Apple.

Oh, this was AMD’s 11th quarterly loss in a row.

So nothing much to get excited about here. Or in the company’s guidance. “Considering current macroeconomic conditions, limited visibility and historical seasonal patterns, AMD expects its Product Company revenue to be up slightly for the third quarter of 2009,” AMD CEO Dirk Meyer said in a statement. “New platform, microprocessor and graphics introductions planned for the second half of 2009 position us well to improve margins and meet our financial goals for the year.”

AMD shares were down more than 11 percent to $3.60 in after-hours trading.

“After losing share to Intel on a sequential basis during three out of four quarters in 2008, AMD managed to reverse the trend in the first quarter of 2009,” iSuppli analyst Matthew Wilkins said in a statement. “AMD increased its allocation of global microprocessor revenue due to strong performances in each area of its microprocessor portfolio, particularly in its notebook products. This was an impressive feat given the economic downturn and the weakness in the PC and server markets.”

Of course, AMD (AMD) did suffer an econalypse-inspired revenue decline in Q1, as did Intel (INTC). And the factors that caused it are expected to persist. iSuppli figures the 2009 microprocessor market will top out at $28.6 billion, down 15.8 percent from $34 billion in 2008.

A bit of good news today amid the chip industry’s seemingly endless procession of bad.

Sales of semiconductors rose 6.4 percent globally from March to April to $15.6 billion, according to the latest metrics from the Semiconductor Industry Association (click on the chart below).

But at $15.6 billion, they were still about 25 percent below the $20.9 billion reported last April. So while a better month than March, April is still a tremendous disappointment–although the SIA is hoping it signals a return to normal sales patterns, albeit at a lower level.

“The better-than-expected 6.4 percent sequential increase in April sales was driven by moderate improvements in a number of end-demand drivers and inventory replenishment,” said SIA President George Scalise. “The PC market–a major consumer of semiconductors–has been stronger than predicted earlier in the year.”

Good news for chip vendors like Intel (INTC) and AMD (AMD), right? One question, though: Since when is inventory replenishment growth?