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NY attorney general sues Intel over antitrust claims
New York Attorney General Andrew Cuomo has filed a lawsuit charging that Intel Corp. illegally abused its dominance in the chip industry in an effort to thwart gains by Advanced Micro Devices Inc.
Intel already faces an AMD antitrust lawsuit in the United States, antitrust investigations by governments in Asia and a proposed $1.5 billion fine by the European Commission over its actions.
The Cuomo lawsuit covers similar ground as the other cases, alleging that Intel offered payments or pressured companies such as Dell Inc. if they agreed to choose Intel chips over AMD’s.
The complaint alleges that Intel paid Dell billions of dollars in order to keep the company from putting AMD chips in its computers.
Dell began offering AMD chips in 2006. “We do provide customer choice,” Dell spokesman David Frink said Wednesday. “We work both with Intel and AMD.” Regarding the lawsuit, Frink said “We’re not going to have any comment on the allegations against Intel.”
According to the complaint, Dell received $6 billion in Intel “rebates” between February 2002 and January 2007. The payments were couched as legitimate discounts to meet AMD price offers.
An internal Dell document cited in the lawsuit said the payments had been called “a monogamy tax for Intel.”
The complaint says that Intel threatened Dell if it started to use AMD chips, as it periodically considered doing.
In 2002, then-CEO Kevin Rollins told Chairman Michael Dell that Intel was willing “to do whatever it takes” to keep Dell out of the AMD camp, the lawsuit says.
In 2005, however, Michael Dell told Intel CEO Paul Otellini that the computer maker was losing customers by not having AMD chips. “We are losing the hearts, minds and wallets of our best customers,” he said in an email cited in the lawsuit.
The following year, Michael Dell told other Dell executives that the company would start using AMD chips “to provide the choice our customers are asking for,” according to the lawsuit.
In retaliation, the lawsuit says that Intel slashed the payments to Dell.
“Rather than compete fairly, Intel used bribery and coercion to maintain a stranglehold on the market,” Cuomo said in a statement. “Intel’s actions not only unfairly restricted potential competitors, but also hurt average consumers who were robbed of better products and lower prices.”
Intel has denied the charges and is appealing the European Commission ruling.
The AMD lawsuit is set to go to trial early next year.
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NetStreams is sold to Utah company
Austin-based NetStreams Inc. has been sold to a Salt Lake City, Utah, company that develops audio conferencing systems.
ClearOne will pay $2 million in cash and assume $2 million in debt. The Utah company also will make payouts over the next two years, based on NetStreams achieving certain performance targets.
NetStreams, which develops digital media networks, will remain in Austin, where it has 20 employees. The company is expecting revenues this year of more than $5 million.
ClearOne had revenues of $35.7 million for its fiscal year that ended June 30.
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Airport traffic up 2 percent in September
Passenger traffic at Austin-Bergstrom International Airport rose 2 percent in September from the year-ago month, the first increase in more than a year.
More than 666,250 people flew through the airport in September.
Among major carriers, Southwest Airlines traffic was up 5 percent; American Airlines was down 13 percent, Continental Airlines was down 0.8 percent, and Delta Airlines was up 39.5 percent.
The Delta gain is skewed by the fact that it merged with Northwest Airlines last year, so the passenger count includes both airlines.
The last time the airport had a year-over-year passenger gain was in August 2008. The next month, recession-hit airlines began cutting flights and seat capacity.
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Dell completes Perot share purchase
Dell Inc. said this morning it had completed its tender offer for shares of Perot Systems Inc. and would quickly move to close its biggest acquisition ever.
Dell’s offer to pay $30 a share for Perot, or about $3.9 billion, expired at midnight Monday. Based on the shares offered by the deadline, Dell said it would own more than 90 percent of Perot’s shares.
The new Dell Services unit will be based in Plano and headed by Peter Altabef, a Perot executive. Perot Systems strengthens Dell’s offering in tech services, helping customers with complex technology integration and other problems.
That is a higher profit area than computer hardware, which now provides more than 70 percent of Dell’s annual revenue.
Dell said the new unit would have 41,000 employees and annual revenue of about $8 billion.
Perot Systems gets a quarter of its revenue from health care, a growth area, and also has a strong government practice.
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Sprint 4G coming to Austin
Sprint announced that its 4G mobile broadband network is now available in the Dallas-Fort Worth area and will soon come to Austin.
Sprint first launched the network in Baltimore in September of 2008, then expanded to Portland, Philadelphia Atlanta and Las Vegas earlier this year.
Later this month, the 4G network will launch in Austin, San Antonio and other Texas cities. And next year, Sprint says it will start the service in markets such as Boston, Houston, New York, San Francisco and Washington, D.C.
Other U.S. carriers have announced 4G plans, but Sprint has been first out of the gate with the service.
The network has a much higher capacity than existing 3G networks — Sprint bills it as 10 times faster — and is capable of feats such as streaming high-definition television.
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Ruiz stepping down as GlobalFoundries chairman
Hector Ruiz, former CEO of Advanced Micro Devices and now chairman of its manufacturing joint venture, will step down in January, after taking an immediate leave of absence, the company said today.
GlobalFoundries did not explain the reason for the move. The company said Ruiz had submitted his resignation in September. It wasn’t clear why that wasn’t publicized at the time.
Ruiz was identified by The Wall Street Journal as the unnamed “AMD executive” who appears in a federal complaint that charged six people in a massive insider trading case. According to the complaint, the AMD executive told a hedge fund consultant last year details of a secret deal to spin off AMD’s manufacturing operations into a joint venture with the government of Abu Dhabi.
Ruiz has not been charged in the case, and there has been no implication that he personally profited by sharing the information.
The move ends a 30-year career in the semiconductor industry.
Technology analyst Roger Kay of Endpoint Technologies Associates Inc. said that Ruiz’ departure reduces distractions for GlobalFoundries related to the insider trading case.
“I think that is the right thing to do,” Kay said.
Besides, Kay added: “He’s done most of what he had to do. And it is clear that his chairmanship at GlobalFoundries was ceremonial.”
Ruiz’s connections around the world in the semiconductor industry are not necessary for GlobalFoundries.
GlobalFoundries did not comment beyond the release saying Ruiz would take a leave until January. Ruiz’s personal spokesman, Jeremy Fielding with the Finsbury Group, also declined to comment further.
Kay said he believes that Ruiz’s departure may have been in the works for a while - even before his name was connected to the insider trading case in Manhattan federal court.
“I’d be inclined to believe that it was actually in the works,” Kay said.
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Austin company part of $1.5 billion Chinese-backed Texas wind farm
Austin-based Cielo Wind Power said today it will partner with Chinese and American companies to build one of the biggest wind farms in the United States.
The project will cost $1.5 billion, cover 36,000 acres in West Texas and generate 600 megawatts of electricity — enough to power 180,000 homes.
A project of that size “will be one of the largest undertakings of its kind anywhere in the world,” Cielo CEO Walt Hornaday said in a statement.
Chinese banks are expected to finance the project, and Chinese companies will manufacture the 240 turbines for the wind farm. Shenyang Power Group is the Chinese entity involved in the project.
The U.S. Renewable Energy Group also is a partner in the project.
UPDATE:
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Read criminal complaint in insider trading case involving AMD
Hector Ruiz, the former CEO of Advanced Micro Devices Inc., was named by The Wall Street Journal in today’s edition as having provided confidential information to a New York hedge fund executive.
Ruiz was not named in the attached federal court filing, but The Journal said was Ruiz was the “AMD Executive” mentioned in the complaint who offered confidential information about the chip maker.
Linked below are two criminal complaints filed in federal court in Manhattan. (See pages 12 - 22 of Complaint No. 1 for portions referring to “The AMD Executive.”)
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Silicon Labs Q3 results beat estimates
Silicon Laboratories Inc. reported solid third-quarter revenue growth led by a strong rebound in its microcontroller chip business and a surge in demand for consumer product applications.
The Austin company said Wednesday that it made a profit of $22.4 million, or 47 cents a share on revenue of $125.9 million for the quarter. The revenue was up more than 20 percent from the second quarter and up 11 percent from the same time a year ago.
The company’s earnings, not counting a stock-based compensation expense of $9.5 million, beat Wall Street analyst estimates by 7 cents a share.
And the company guided for more strong business ahead, saying it expects revenue in the range of $124 million to $129 million, a 25 to 30 percent increase from the last quarter of 2008. A year ago, the company made a profit of $1.2 million, or 2 cents a share, on revenue of $113.5 million.
“While we are pleased with the success of the business, I strongly believe that there is far more potential for growth,” said CEO Necip Sayiner. “2009 will be another record year for new product launches. We have an increasing number of developments in the pipeline and we have many more ideas in the funnel. We believe that all of this combined will create new opportunities for us to continue our growth story into 2010 and beyond.”
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WSJ links Hector Ruiz to insider trading case
The Wall Street Journal reported late Tuesday that Hector Ruiz, former CEO of Advanced Micro Devices Inc., has been linked to a massive federal insider trading case.
The newspaper, in its online edition, said that Ruiz was a source of confidential AMD information to Danielle Chiesi, who was one of six people charged Oct. 16 in the case involving the Galleon Group hedge fund.
The Journal cited someone familiar with the case as the source for its story. Ruiz has not been named in any public documents on the case and is not a defendant.
Drew Prairie, a spokesman for AMD, did not immediately return phone calls from the American-Statesman.
He told the Journal that the company “is continuing to evaluate the matter, and we are not aware of any allegation of criminal misconduct on the part of AMD or any current or former employee.”
The Journal said that Ruiz declined to comment on its story.
Ruiz headed AMD for seven years before resigning as CEO last July to concentrate on completing the spinoff of the company’s manufacturing operations.
He is chairman of the spinoff company, GlobalFoundries Inc., which is jointly owned by AMD and an investment company owned by the government of Abu Dhabi.
According to the federal charges, Chiesi received inside information about the proposed deal between AMD and Abu Dhabi before it became public. The charges said Chiesi then used that information on behalf of New Castle Funds, where she was a consultant, and shared it with Raj Rajaratnam, founder of the Galleon Group.
According to the Journal, Ruiz provided some of that information to Chiesi. The newspaper said he is the unnamed “AMD executive” mentioned in the federal complaint.
One of her other alleged sources was Robert Moffat, a high-ranking IBM executive who also has been charged in the case.
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No federal smart grid money for Austin
Austin won’t be getting any of the $3.4 billion in federal smart grid funding announced by President Barack Obama on Tuesday.
Austin Energy had applied for a $100 million grant to speed up its green-energy initiative, said Roger Duncan, general manager of Austin Energy.
“If you look at the ones that were awarded, particularly in Texas, most were for projects we’ve already completed or have plans to complete,” Duncan said.
Texas utilities won $258.2 million in federal money. The biggest grant went to Houston-based CenterPoint, which will get $200 million to complete the installation of 2.2 million smart meters and install more than 550 sensors and automated switches.
The president announced 100 grants in all to utilities, both private and municipal, nationwide.
At the end of the month, Austin will finish switching customers to electric meters that radio back regular reports on energy use. The new meters will eliminate the need to send an employee once a month to check how much power a home or building used.
The other utilities are “using the grant money to sort of catch the rest of the country up to where Austin is at,” said Duncan, who has overseen many of the city’s conservation programs.
Duncan announced earlier this month that he will step down in March. He said that before leaving he hopes to win approval for an ambitious plan to triple the amount of electricity Austin gets from renewable sources such as wind and solar power.
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Arthrocare names permanent CEO
Austin-based Arthrocare Inc., which makes medical devices, named David Fitzgerald as president and CEO.
Fitzgerald had been holding those jobs on an interim basis since Feb. 19, following the resignation of then-CEO Mike Baker and two other senior executives.
An internal audit found problems with the company’s insurance billing practices.
Fitzgerald, 75, has been an Arthrocare director since 2003. He had a 25-year career at Pfizer Inc., retiring in 1996.
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IBM loses another round in suit against exec who jumped to Dell
IBM Corp. lost another round in its effort to stop a former top executive from jumping to Dell Inc.
Last week, a federal appeals court in New York rejected IBM’s request to block David Johnson from working for Dell. IBM sued Johnson earlier this year over the move, saying it violated a non-compete agreement. Johnson has been working for Dell since May.
Johnson has said he deliberately signed the agreement on the wrong line, making it invalid.
He was IBM’s top mergers and acquisitions executive, and Dell has said it is building a team to pursue more acquisitions to grow its business.
However, Dell has said Johnson was not involved in its pending $3.9 billion acquisition of Perot Systems Inc.
In June, a federal district court rejected IBM’s arguments and its request for an injunction against Johnson, which precipitated the appeal.
IBM said it will continue to pursue its lawsuit.
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SolarWinds files for secondary stock offering
SolarWinds Inc., which went public in May, now says it and its shareholders want to sell up to another 11.5 million shares.
The Austin company, which develops network management software, raised an estimated $112.5 million with its may offering of 12.1 million shares.
Now the company has filed for a second round, where it will offer 1.5 million of its shares and other shareholders will offer 8.5 million. Underwriters can sell up to an additional 1.5 million shares in the offering.
The quick secondary offering appears to be tied to the strengthening stock market and the company’s strong record of growth and profits.
SolarWinds reported $23.0 million in profit on $83.5 million in revenue for the first nine months of 2009. compared with $16.7 million in profit on $68.2 million in revenue for the same period of last year.
The company said it plans to use the estimated $27.6 million it expects to raise in the offering for additional capital and to pay down some of its long-term debt.
The rest of the offering would go to provide funds for venture capital firms that have backed the company as well as the family trust of founder Donald Yonce.
The company was founded 11 years ago in Tulsa, Okla, and moved to Austin in late 2006,
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Austin gas prices jump 14 cents in a week
Austin area gasoline prices rose 14 cents in the past week, the biggest jump in more than a year, AAA Texas reported.
The average price in Central Texas was $2.49, up from $2.35 a week ago.
The pattern was similar around the state, with the biggest increase being 17 cents in Galveston and the smallest being 9 cents in Texarkana.
Steep recent increases in the price of oil is one factor, said AAA spokesman Dan Ronan. Oil has risen to above $80 a barrel from below $70 just two weeks ago.
Additionally, Ronan said traders are buying and storing oil in anticipation of increased demand as the economy improves early next year. And a larger-than-usual number of refineries are undergoing fall maintenance.
Gas prices still are lower than they were at this time last year, but the gap is shrinking, AAA said.
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OnRamp Access gains new investors
OnRamp Access LLC, a longtime Austin data center operator, has sold an undisclosed equity interest to two California investors for $5.2 million, according to a filing with the Securities and Exchange Commission.
Investors Ryan Robinson and Lucas Braun said they have joined the company as partners with founder Chad Kissinger to help the company expand. Their investment was completed Sept. 30.
Kissinger began the business as an Internet service provider 15 years ago, but has evolved it into a data center and IT services company. The company has nearly 500 data center customers, Kissinger said.
“The company has been doing phenomenally well and we want to keep building the systems to allow the company to continue its growth,” Robinson said. That could mean expanding the data center or adding another data center location, he added.
Robinson said he formerly worked for a hedge fund in San Francisco and Braun worked as a management consultant for technology companies.
Kissinger said one potential growth area for the company is to create “private clouds,” which would be systems of servers and storage networks with virtualization software that would support the online delivery of software and other online content.
OnRamp, which employs 23 people, operates a 15,000-square-foot data center on Montopolis Drive in southeast Austin.
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South Congress church plans big new complex
The leaders of the South Congress Avenue Baptist Church have ambitious plans to replace their house of worship with a contemporary complex that would include a sanctuary, a religious bookstore and cafe and a parking garage that would be leased to nearby businesses when the church isn’t using it.
George Tuthill, pastor of the 118-year-old congregation, said the 1950s- and 1960s-era buildings now on the 2-acre site on South Congress, between Monroe and Elizabeth streets, lack insulation and need to be rebuilt.
The church has hired the Dick Clark architectural firm to design the new campus. “All of our buildings are aging out,” Tuthill said. “We want something that looks good. We want it be neighborhood-friendly.”
Jeff Krolicki, a senior associate at Dick Clark Architecture, said the plans are in the early stages, but that the design will be “responsive to both the neighborhood and the urban context of Congress Avenue.”
“We see the project as an opportunity to blend in and become another piece of the eclectic quilt of South Congress,” he said.
The South River City Citizens, a neighborhood association that represents several South Austin neighborhoods, has raised some objections to the plan, which would rezone the eastern half of the block from single-family to office. The western half, fronting Congress, would be rezoned for commercial use.
The City Council is scheduled to vote Thursday on the proposed changes.
Even if the council rejects the church’s application to rezone the property, it could still rebuild, only not on such a grand scale, said Stephen Rye, a case manager with the Neighborhood Planning and Zoning Department.
Sarah Campbell, president of South River City Citizens, said her organization’s biggest concern is that once the property is zoned for office, the church could leave, and the neighborhood could be stuck with an office park adjacent to single-family homes.
Marty Peck, a 67-year-old retiree who lives behind the church on Nickerson Street, said he has no issue with rezoning the part of the property along Congress. “We applaud that, because it’s good for Austin,” he said.
But he shares the neighborhood group’s concerns about what might happen on the eastern half of the site if the church ever were to leave.
Tuthill said he has tried to remind neighbors of the church’s dedication to the area, demonstrated by its repeated rejection of offers to buy the property over the years.
“We’re glad to be here. We’ve been part of this neighborhood for many, many years,” he said. “We have a huge, 118-year investment on this neighborhood.”
Tuthill said the church has promised to roll back the zoning to allow only single-family residences if it were to ever leave.
Rob Lippincott, the owner of Guero’s Taco Bar across Congress from the church, said he hopes the church stays and succeeds with its plan.
“I like those guys,” said Lippincott, who also is a co-developer of the Dick Clark-designed 04 condominium and retail project near the restaurant.
“If they are talking about building a parking garage, the neighborhood should be wholeheartedly for it,” he said, citing ongoing neigborhood concerns about parking in the area.
Besides a garage, Dick Clark Architecture has put together a plan that includes a new sanctuary to replace the one built about four decades ago, several classrooms for a new private school, a child daycare center, an administrative building and a founders hall that would serve as both an indoor gym and a reception area.
Also, an ancient live oak tree is slated to remain intact and a playground is planned around it.
Tuthill declined to provide specifics on how the church would pay for the project. However, some of the money could come from leasing on the adjacent block on Congress, which the church owns, to a developer.
The developer, Bill Gurasich, has leased the land in order to build a boutique hotel on the site, which is now occupied by several food trailers.
Gurasich is co-owner of the Mansion at Judges Hill boutique hotel near the University of Texas. He is scheduled to send a representative to the November meeting of the South River Citizens group to give an update on the hotel project.
Tuthill said he is remaining positive ahead of the council vote. He said he isn’t even considering what would happen if the council rejects the church’s proposed zoning changes.
“We’re not even thinking in those terms,” he said. “We believe it will be approved.”
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Freescale cuts more jobs
Freescale Semiconductor said Wednesday that it has cut an undisclosed number of jobs this week both in Austin and other locations.
Spokesman Rob Hatley said the latest job cuts were part of the company’s previously announced plans to cut up to 20 percent of its global workforce, or up to 4,800 jobs, this year as it realigns its business and copes with weak demand because of the global economic slump. Some of the job cuts were because the company exited the business of designing and making cell phone chips.
The latest cuts “are global in nature,” Hatley said. “They are part of the overall efforts to align the company to improve our operating efficiency and put the operating business in line with demand.”
The reductions, he said, affected workers worldwide and in a wide range of jobs.
Most of the latest cuts will take effect this quarter.
Freescale said in January that it had cut 228 jobs in Austin. In April, the company said it had cut another 170 jobs in Austin and 900 worldwide as it was finishing its departure from the cell phone business.
The company is expected to speak to severance costs tied to the latest cuts when it announces its third quarter financial results on Thursday.
Freescale estimates that it has 5,000 workers in Austin and about 20,000 worldwide after the latest job reductions.
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Cirrus Logic reports Q2 growth
Stronger sales of audio processing chips drove Cirrus Logic Inc.’s revenue higher for its second quarter ended in September.
The Austin chip company reported a profit of $6.8, or 10 cents a share, on revenue of $55.7 million for the quarter. That compared with a profit of $6.4 million, or 10 cents, on revenue of $53.3 million for the same quarter a year ago. The results were a dramatic leap from the first quarter when revenue totaled only $37.5 million.
The stock price rose 6 cents, or 1 percent, to $5.92 a share, in early trading after the results were reported before the start of trading today.
The results were “driven by both new audio product ramps as well as a modest recovery across our other product lines,” said CEO Jason Rhode, “We expect further revenue growth in Q3, coupled with gross margin improvements due to a higher mix of (energy-product) revenue as well as continued improvements to our product cost structures.”
The company said it expects revenue for the current quarter of between $58 million and $62 million.
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Home resales jump in September
Austin area existing home sales rose 6 percent in September, the first year-over-year increase in more than two years.
The 1,780 sales were up from 1,748 in August, and up from 1,673 in September 2008.
Pending sales — sales in the pipeline to close in October — were up 24 percent from a year ago.
Real estate agents have been expecting an increase, thanks in part to an $8,000 federal tax credit for first-time buyers. The credit is set to expire Nov. 30, which means buyers must move quickly to find a house, apply for a mortgage and close on the transaction in order to qualify.
“As the deadline for the first-time homebuyer tax credit approaches on Nov. 30, we may continue to see increases in home sales into October and November,” said Jay Gohil, chairman of the real estate board.
The median single-family home price was up 2 percent last month from a year earlier, to $185,250.
For the year to date, home resales are down 14 percent from the same months of 2008, and the median price is even at $190,000.
Home sales have been slowly improving this year along with the economy, spurred by the tax credit and mortgage rates that have hovered around 5 percent.
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Group 1 discloses sales at dealerships it’s selling to Maxwell
Nyle Maxwell isn’t disclosing what he paid last week to buy back two dealerships from Group 1 Automotive, the Houston-based chain which bought them in 1998. Group 1 isn’t saying either.
But in a securities filing today, Group 1 revealed that the dealerships had combined sales of $62.1 million in the past 12 months.
Maxwell, the former mayor of Round Rock, already owned Nyle Maxwell Pontiac-GMC in Round Rock. But he said he wanted to get more involved in the dealership business, where he has worked for more than two decades, and have more interaction with customers.
Maxwell is buying two Chrysler-Jeep-Dodge dealerships in Taylor and Northwest Austin.
They will be renamed the Nyle Maxwell Chrysler Dodge Jeep Supercenter and the Nyle Maxwell Chrysler Dodge Jeep The Original in Taylor.
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Avatar has it right. The PMPs are driving Dell into the ground. That’s what happens when you hire more planners than doers. Dell initially thrived by taking customers’ money before they built their computers, and then making profits off the
... read the full comment by Bruce | Comment on NY attorney general sues Intel over antitrust claims Read NY attorney general sues Intel over antitrust claims
Thx, this has definitely made my day!
wtf
... read the full comment by LarryXA | Comment on NetStreams is sold to Utah company Read NetStreams is sold to Utah company
Thx, this has definitely made my day!
wtf
... read the full comment by LarryXA | Comment on NetStreams is sold to Utah company Read NetStreams is sold to Utah company
I do speak for myself kathy, my observations from first hand experience witnessed the promotion of BPI (six sigma) processed FLOODING every department under the guise of reducing waste and inefficiencies. Sure it might have been great for 20% of those projects.
... read the full comment by avatar | Comment on NY attorney general sues Intel over antitrust claims Read NY attorney general sues Intel over antitrust claims
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