Chipping Away at Intel

Intel's rough year gets worse; competitors cheer

By Scott Budman
|  Wednesday, Dec 16, 2009  |  Updated 5:00 PM PDT
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Chipping Away at Intel

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Intel, targeted again by the feds.

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Homeowners, 401(k) holders, job seekers, and Intel.  All have had a rough year.  For Intel (INTC), there's really not much light at the end of the tunnel.

The world's biggest chipmaker, fresh off skirmishes with competitors AMD and Nvidia, and still mired in anti-trust battles in two countries, got another body blow wednesday:  Charges filed by the Federal Trade Commission, charging Intel with anti-competitive behavior.  As put forth by Richard Feinstein of the FTC, "there's a difference between lowering prices, and penalizing one's customers for doing business with competitors."

Intel does control roughly 80 percent of the CPU chip market, which is a good position to be in.  But new revenue has been tough to come by lately, and Intel's profits, along with its stock price, has stagnated in recent years.  The company itself says that's evidence of a competitive field, and if the FTC had its way, the whole chip business itself would shrivel up.  "They'll damage innovation," says Intel's Chuck Malloy.  "Not just for Intel, but for any company going forward.

The FTC says it's not looking for money here, but instead wants Intel to change the way it does business.  In response to the charges, Intel shares fell further onm wednesday, while competitors like AMD (AMD) and Nvidia (NVDA) surged forward. 

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