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Chipmakers wage image wars to government leaders

When the chips are down, pump up the public image. That's been the strategy of Intel as it fights against a federal antitrust suit claiming the company used its dominance to unfairly edge out competitors.

Now, competitors are trying to battle back.

When the Federal Trade Commission filed its antitrust suit against Intel in December, the agency brought new attention in Washington to claims by graphics chip competitor, Nvidia, that the company was blocking competition in the graphics chip market.

Nvidia wants to keep up the drumbeat. Company officials visited The Post two weeks ago during a tour of Washington to explain why it believes in the FTC's case. It was their first time visiting Capitol Hill to meet with lawmakers about the agency's suit. Nvidia has a separate contract suit filed against Intel in a Delaware court.

“Intel has armies of people and they are waging a public relations battle by saying the suit will hurt a great American innovative company that produces lots of jobs,” said David Shannon, Nvidia's general counsel. “We’re saying we are also producing jobs for the American economy but more importantly what this case is about is competition and making sure companies act properly under the law.”

As part of President Obama's education goals, Intel announced it would grant $200 million over 10 years to helping train math and science teachers. The company hosted a conference in December with top policy makers and thinkers called "Innovation Economy." At the conference, Intel CEO Paul S. Otellini stressed the importance of high-tech companies developing a stronger foundation for the U.S. economy. He chairs a task force set up by the high-tech industry to give government ideas on innovation, science and technology.

Intel spokesman Chuck Mulloy disputes Nvidia’s claims that Intel is unfairly shutting out graphics chips competitors. He stressed that the FTC's suit, which the company has called "misguided," is separate from Nvidia's lawsuit. The FTC's suit goes to a hearing before an administrative judge in September.

The agency said Intel refused to license its central processor (CPU) technology to companies like Nvidia. Graphics chips need to work along side a central processor, the brains of a computer. Nvidia only makes graphics chips. Intel and AMD, however, make chipsets with both CPUs and graphics chips.

“We’ll be doing our own public relations tour in March,” Mulloy said. Intel captures about 55 percent of the graphics chip market and Nvidia has about one-quarter market share.

Antitrust law experts said the FTC’s suit went beyond actions by other regulatory bodies in Europe and Asia. Those regulators focused on the CPU market and allegations that Intel used its dominance to bully and bribe its way into contracts with computer makers. The FTC also looked into the fast-growing graphics chips market that make up a smaller portion of the overall chip market but is expected to boom with more videos and games being transmitted over the Web.

By Cecilia Kang  |  February 1, 2010; 8:00 AM ET
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>>>Intel captures about 55 percent of the graphics chip market and Nvidia has about one-quarter market share

Intel has no "market share" with the discrete graphic chip. However, Intel has Integrated graphic chips with some CPU's. Some of the issues between the companies is about the discrete device. Intel failed in the discrete device and cancelled all the efforts to market, manufacture, etc.

Posted by: ztekman | February 2, 2010 9:41 AM | Report abuse

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