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Intel Fails to Overturn $2.18-Billion Patent Verdict, Plans Appeal

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By Reuters | Updated: 11 August 2021

A US judge has rejected Intel’s request to set aside a jury verdict ordering the chipmaker to pay VLSI Technology LLC $2.18 billion (roughly Rs. 16,225 crores) for patent infringement.

US District Judge Alan Albright in Waco, Texas, denied Intel’s motion for a new trial in a sealed order issued late Monday.

Jurors on March 2 had awarded VLSI $1.5 billion (roughly Rs. 11,170 crores) and $675 million (roughly Rs. 5,020 crores) for Intel’s respective infringement of two patents that were once owned by Dutch chipmaker NXP Semiconductors NV.

Intel said in a statement on Tuesday it was disappointed with the decision and intended to appeal. It also called for reforms to prevent “litigation investors” from using low-quality patents to extract “exorbitant” damages, saying the practice stifles innovation and hurts the economy.

In seeking a new trial, Intel said the verdict was tainted by erroneous jury instructions and evidentiary rulings, and appeared to be based on earlier Intel settlements that VLSI’s own damages expert admitted were not comparable.

Santa Clara, California-based Intel noted that the verdict was the second largest by a jury in a patent case, and that the three other largest verdicts had been vacated.

A different Waco jury ruled in Intel’s favour on April 21 in a separate patent infringement lawsuit in which VLSI had sought $3.1 billion (roughly Rs. 23,070 crores).

© Thomson Reuters 2021

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IBM Revenue Misses on Weakness in Legacy Infrastructure Unit

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By Reuters | Updated: 21 October 2021

IBM on Wednesday missed market estimates for quarterly revenue as its managed infrastructure business suffered from a decline in orders ahead of a spinoff next month, sending its shares down 4% in extended trading. The lower-margin, legacy unit provides technical support to IBM’s clients and has shrunk in recent years as companies moved to the cloud, becoming a drag on Big Blue’s earnings.

“As we issued the effective date for the spin-off of our managed infrastructure business, our clients paused all new project activities at the end of September and that impacted us here,” Chief Financial Officer James Kavanaugh said in an interview.

Revenue at the global technology services unit, which houses the business set to be called Kyndryl after the spinoff, fell 4.8 percent to $6.15 billion (roughly Rs. 45,960 crores) in the third quarter ended September 30.

Kavanaugh also said demand dropped at the systems business, home to IBM’s mainframe computers, as the end of the product cycle neared, driving a 12 percent fall in the unit’s revenue.

The slowdown in the legacy business has prompted 110-year-old IBM to shift focus to hybrid-cloud, an area where it sees a $1 trillion (roughly Rs. 74,73,470 crores) market opportunity, to boost growth and better compete with Amazon and Microsoft.

Revenue at the cloud and cognitive software unit was up 2.5 percent at $5.69 billion (roughly Rs. 42,530 crores) but missed analysts’ estimates of $5.77 billion (roughly Rs. 43,130 crores), according to Refinitiv data.

The weakness at IBM’s “supposedly high-growth areas is more problematic” than the revenue miss, said Wedbush analyst Moshe Katri.

Total revenue rose slightly to $17.62 billion (roughly Rs. 1,31,700 crores), missing expectations of $17.77 billion (roughly Rs. 1,32,850 crores).

But IBM’s revenue adjusted for the Kyndryl spinoff was 2.5 percent higher, helped in part by firmer demand for its consulting services from enterprises digitizing their operations during the COVID-19 pandemic.

IBM earned $2.52 (roughly Rs. 190) per share on an adjusted basis, compared with estimates of $2.50 (roughly Rs. 185).

© Thomson Reuters 2021

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Big Tech Antitrust: US Bill Introduced to Stop Amazon, Google, More Firms From Favouring Own Products

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By Reuters | Updated: 19 October 2021

About a dozen US senators from both parties on Monday formally introduced a bill that would bar Big Tech platforms, like Amazon and Alphabet’s Google, from favouring their products and services. The bill follows others introduced with the goal of reining in the outsized market power of tech firms, including industry leaders Facebook and Apple. Thus far none became law, although one, which would increase resources for antitrust enforcers, passed the Senate.

Senators Amy Klobuchar and Chuck Grassley’s bill would prohibit platforms from requiring companies operating on their sites to purchase the platform’s goods or services and ban them from biasing search results to favour the platform.

A companion has passed the House Judiciary Committee. It must pass both houses of Congress to become law.

Reuters reported on Wednesday, after reviewing thousands of internal Amazon documents, that Amazon’s India operations ran a systematic campaign of creating knock-offs and manipulating search results to boost its own private brands in the country, one of the company’s largest growth markets.

When news of the bill broke last week, both Amazon and Google warned of potential unintended consequences.

Amazon said in a statement that the bill, if it became law, “would harm consumers and the more than 500,000 US small and medium-sized businesses that sell in the Amazon store, and it would put at risk the more than 1 million jobs created by those businesses.”

Google said that the measure would make it more difficult for companies to offer free services – Google’s search and maps are both free – and would make “those services less safe, less private and less secure.”

Facebook, which said that it competes with a range of social media, including TikTok and Twitter, said antitrust laws should “not attempt to dismantle the products and services people depend on.”

Klobuchar chairs the Senate Judiciary Committee’s antitrust subcommittee while Grassley is the top Republican on the full committee. Co-sponsors include five Democrats and five Republicans.

Companies expressing support for the bill included Spotify, Roku, Match Group and DuckDuckGo, Klobuchar’s office said in a statement.

The bill would not break up the companies or force them to drop services but bars some bad behaviours that affect businesses that rely on their platforms, said Stacy Mitchell with the Institute for Local Self-Reliance who said that she would prefer a more aggressive bill.

© Thomson Reuters 2021

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Intel Breaks Ground on $20-Billion Arizona Plants as US Chip Factory Race Heats Up

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By Reuters | Updated: 25 September 2021 

Intel on Friday broke ground on two new factories in Arizona as part of its turnaround plan to become a major manufacturer of chips for outside customers.

The $20 billion plants — dubbed Fab 52 and Fab 62 — will bring the total number of Intel factories at its campus in Chandler, Arizona, to six. They will house Intel’s most advanced chipmaking technology and play a central role in the Santa Clara, California-based company’s effort to regain its lead in making the smallest, fastest chips by 2025, after having fallen behind rival Taiwan Semiconductor Manufacturing.

The new Arizona plants will also be the first Intel has built from the ground up with space reserved for outside customers. Intel has long made its own chips, but its turnaround plan calls for taking on work for outsiders such as Qualcomm, Amazon.com’s cloud unit, as well as deepening its manufacturing relationship with the US military.

“We want to have more resilience to the supply chain,” Intel Chief Executive Pat Gelsinger, who earlier in the week attended a White House meeting on the global chip shortage, told Reuters in an interview. “As the only company on US soil that can do the most advanced lithography processes in the world, we are going to step up in a big way.”

Gelsinger said it was too early to say how much of the new plants’ capacity would be reserved for outside customers. He said the plants would produce “thousands” of wafers per week.

Wafers are the silicon discs on which chips are made, and each can hold hundreds or even thousands of chips.

Intel rival TSMC has also purchased land to build its first US campus in Phoenix, not far from Intel’s location, where TSMC plans up to six chip factories , Reuters previously reported.

Gelsinger said Intel plans to announce another US campus site before the end of the year that will eventually hold eight chip factories.

© Thomson Reuters 2021

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Intel to Invest Up to EUR 80 Billion in Boosting EU Chip Capacity: CEO Pat Gelsinger

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By Reuters | Updated: 8 September 2021

Intel said it could invest as much as EUR 80 billion (roughly Rs. 6,97,050 crores) over the next decade to boost the European region’s chip capacity and will open up its semiconductor plant in Ireland for automakers.

Intel CEO Pat Gelsinger, speaking at Munich’s IAA auto show, also said the company would announce the locations of two major new European chip fabrication plants by the end of the year.

There is speculation about possible production sites, with Germany and France seen as leading contenders while Poland, where Intel also has a presence, also in the picture.

The CEO said the aim was for a “total project of EUR 80 billion (roughly Rs. 6,97,100 crores) over the next decade that would be a catalyst for the semiconductor industry… a catalyst for the entire technology industry.”

Intel, the biggest maker of processor chips for PCs and data centres, in March said it planned to open up its chip factories for outsiders to use.

Gelsinger told Reuters in April that the company wanted to start producing chips for automakers within six to nine months to help alleviate a shortage that has disrupted vehicle production around the world.

It is unclear whether the latest announcement means Intel will meet that goal.

“Cars are becoming computers with tires. You need us and we need you… The aim is to create a centre of innovation in Europe, for Europe,” Gelsinger said.

The “Intel Foundry Services Accelerator” is aimed at helping automakers learn to make chips using what Intel calls its “Intel 16” chip manufacturing technology and later move to its “Intel 3” and “Intel 18A” technologies.

Those manufacturing processes would be far more advanced than most of the processes currently used in the automotive industry. Intel said that nearly 100 automakers and key suppliers – including BMW AG, Volkswagen AG, Daimler AG, and Bosch – had expressed support for its programmes. An Intel spokesman declined to confirm whether any had committed to becoming customers.

Gelsinger has been quoted saying Intel wants the EU to commit state aid to Intel’s proposed European investment drive.

Intel views automakers as a key strategic priority. Gelsinger said Tuesday that the company believes chips will make up 20 percent of the cost of vehicles by 2030, a five-fold increase from 4 percent of the cost in 2019.

© Thomson Reuters 2021

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Tesla CEO Elon Musk Signals Competition Concerns Over Nvidia-Arm Deal: Report

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By Agencies | Updated: 30 August 2021

Tesla Chief Executive Elon Musk has signaled competition concerns over Nvidia’s planned purchase of British chip designer Arm, the Telegraph reported on Saturday, citing multiple sources.

E-commerce giant Amazon and smartphone maker Samsung have also lodged opposition to the deal with US authorities, the newspaper reported.

Earlier this year, the US Federal Trade Commission opened an in-depth probe into the takeover. The probe findings are expected in the coming weeks, according to the newspaper.

Tesla, Amazon, Samsung, and Nvidia did not immediately respond to a Reuters request for comment.

Nvidia is likely to seek European Union antitrust approval for the $54 billion (roughly Rs. 3,96,910 crores) purchase of Arm early next month, with regulators expected to launch a full-scale investigation after a preliminary review, people familiar with the matter have said.

Last week, Musk said that Tesla was working on improving the much-awaited update to its self-driving software “as fast as possible.”

Musk tweeted that the Full Self-Driving Beta version 9.2 is “actually not great imo [in my opinion], but Autopilot/AI team is rallying to improve as fast as possible.”

“We’re trying to have a single stack for both highway & city streets, but it requires massive NN (neural network) retraining.”

Tesla had recently come under the scrutiny of US safety regulators, who opened an investigation into its driver assistant system because of 11 accidents where its cars crashed into stationary police cars and fire trucks.

The incidents dating back to 2018 included one fatal crash and seven that resulted in injuries to 17 people, according to the National Highway Traffic Safety Administration.

The agency “is committed to ensuring the highest standards of safety on the nation’s roadways,” a spokesperson said, and in order to “better understand the causes of certain Tesla crashes, NHTSA is opening a preliminary evaluation into Tesla Autopilot systems.”

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Dell Rides Strong Demand for Laptops, Desktops, Cloud Services Due to Remote Work to Beat Q2 Revenue Estimates

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By Reuters | Updated: 27 August 2021

Dell beat market estimates for second-quarter revenue on Thursday as the shift to hybrid work kept demand strong for its laptops, desktops and cloud services.

People globally continue to spend on computer devices even after a year of working from home. Figures from International Data showed shipments of PCs rose 13 percent from April to June, but the pace of growth was much slower than last year’s frenzy.

While the industry has faced pressure from components shortage and supply chain woes, revenue at Dell’s client solutions unit – home to its hardware devices – surged 27 percent to a record $14.3 billion (roughly Rs. 1,05,990 crores).

Its cloud-computing unit, VMware, grew 8 percent, thanks to orders from companies looking to cut costs and expand their digital presence.

Total revenue jumped 15 percent to $26.12 billion (roughly Rs. 1,93,600 crores), beating the analysts’ average estimate of $25.53 billion (roughly Rs. 1,89,230 crores), according to Refinitiv data.

The reopening of the economy has redirected some consumer spending away from computers to other sectors. But a recent rise in COVID-19 cases has prompted renewed curbs and could potentially boost the demand for remote-working equipment.

Dell’s net income fell to $880 million (roughly Rs. 6,520 crores), or $1.05 (roughly Rs. 80) per share, in the quarter ended July 30, from $1.01 billion (roughly Rs. 7,490 crores), or $1.37 (roughly Rs. 100) per share, a year earlier.

© Thomson Reuters 2021

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