Intel’s pain is AMD’s gain

On a day when tech stocks are taking a terrible shellacking, Advanced Micro Devices stands out as a big gainer on the news that Intel is being investigated by the New York Attorney General’s office for possible antitrust violations.

New York Attorney General Andrew Cuomo served the chipmaking rivals with subpoenas as he looks into charges that Intel stifled competition and hurt consumers by pressuring customers to exclude AMD from their list of suppliers. The allegations are similar to those made in an ongoing lawsuit brought by AMD.

“After careful review, we have determined that questions raised about Intel’s potential anticompetitive conduct warrant a full and factual investigation,” Cuomo said in a press release.

But those charges, which echo years of industry rumors, won’t be easy to prove. In an interview with BusinessWeek, John Peirce, a partner at law firm Bryan Cave who specializes in antitrust and commercial litigation said: “Predatory pricing and exclusive dealing are a tough case under U.S. law.”

AMD sued Intel in a Delaware federal court in 2005, alleging that the microprocessor giant has consistently abused its monopoly position in the market to prevent PC vendors from using AMD chips. A trial date has been set for April 27, 2009.

Regulators in Japan, South Korea and Europe (via the EU) are also investigating Intel’s competitive practices.

Intel has consistently denied the charges, saying that it never sells products below cost.

AMD has made significant market share gains in the last several years, but has been hurt by an ugly pricing war with its much larger rival. The smaller chip maker claims that its gains would have been even larger had it been competing on a level field.

In recent trading, shares of AMD were up a bit more than 7%, or 42 cents, to $6.38 a share, while Intel was off 54 cents, or 2.4% to $22.