Intel shares fell 2.6% on Tuesday as the largest chipmaker was charged with infringing two patents owned by VLSI Tech and is now required to pay $ 2.18 billion. Intel said it would file an appeal.
Intel (INTC) shares, up 29% in the most recent quarter, fell 2.6% on Tuesday after a Texas federal court ordered the company to pay $ 2.18 billion in chip-related patent infringement.
According to the court order, Intel has infringed two patents owned by VLSI Technology. These patents include technologies that increase the power and speed of processors, which is a key competitive issue.
According to the prosecutor, “Intel has sold nearly a billion processors that infringe these two patents.”
Intel denies infringement of any of the patents and declares that one of them was invalid and that the technology was executed by Intel engineers.
The company said it “strongly disagrees with the court’s verdict” and intends to appeal. If Intel loses the appeal, the $ 2.18 billion fine will be one of the largest for the company and the industry average.
Intel is in a tough spot due to manufacturing process problems and intense competition, but the company ended fiscal 2020 with a strong profit, increasing its dividend and free cash flow of $ 21.1 billion. This means that if the penalty of $ 2 , 18 billion will be applied, it will not greatly affect the overall performance of the company.
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