Digital ‘facing reality’ with Alpha sale talks

It could just be a case of Digital facing reality -that's how IDC sees reports that Digital may sell its Alpha RISC microprocessor technology to Intel. IDC New Zealand general manager Graham Penn says he can see why Digital may want to back out of the microprocessor space, which is "a hole you keep pouring huge amounts of money in." Meanwhile, a Digital New Zealand spokesman says the local office had been advised not to comment and Computerworld was unable to contact Intel's New Zealand general manager by deadline.

It could just be a case of Digital facing reality —that’s how IDC sees reports that Digital may sell its Alpha RISC microprocessor technology to Intel.

Meanwhile, a Digital New Zealand spokesman says the local office had been advised not to comment and Computerworld was unable to contact Intel’s New Zealand general manager by deadline.

The Wall Street Journal says Digital is discussing selling Alpha technology to Intel for more than $US1.5 billion. The suggestion follows a patent battle between the two which has been going on since May, when Digital sued Intel for infringing on 10 Alpha-related patents to build Intel’s Pentium line of chips. Several weeks later Intel filed its own suit against Digital over alleged misuse of technical information Digital had obtained through a non-disclosure agreement with Intel. Overseas the two companies have not commented on the story.

IDC New Zealand general manager Graham Penn says it would be an unusual solution to the patent fight, because Intel is working closely with HP to develop Merced. “That is really intended to occupy the 64-bit space and Digital’s already there with Alpha, and presumably it’s using similar techniques to enable it to improve the clock speeds.”

But while he’s surprised at the rumour, he can understand what may be the rationale for a sale. He says he can see why Digital may want to back out of the microprocessor space.“It’s a hole you keep pouring huge amounts of money in.”

Penn says it may be that Digital has concluded it hasn’t been able to attract enough users to Alpha. “My guess is that Digital probably recognises the realities of today’s market, and if what’s rumoured is true, for Digital it may well be the most satisfactory way out of a difficult situation.”

He says the motivation could also be to settle the lawsuit, which he believes could well be Intel’s motivation. “Maybe Digital is being pragmatic and Intel may find it’s a convenient way to get rid of the monkey off its back.”

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