CNET también está disponible en español.

Ir a español

Don't show this again

Culture

AMD sues Alcatel over flash memory

The chipmaker says it has filed a lawsuit against its customer Alcatel Business Systems for allegedly defaulting on promises to buy flash memory through 2002.

Chipmaker Advanced Micro Devices announced on Tuesday that it has filed a lawsuit against its customer Alcatel Business Systems for allegedly defaulting on promises to buy flash memory through 2002.

The filing follows Alcatel's announcement Monday that it would eliminate 1,100 U.S. jobs, about 5 percent of its worldwide work force.

"AMD met all of its obligations to Alcatel, passing up opportunities to sell its products to other customers at prices significantly higher than those provided for in the agreement," Walid Maghribim, senior vice president at AMD and president of the company's memory group, said in a statement.

Long-term sales contracts for flash memory have become fairly common in the last two years as a way to even out the fluctuations in supply and demand. Flash memory prices skyrocketed last year amid persistent shortages. Intel earlier this year signed a three-year deal to supply flash memory to Cisco Systems, and Lucent Technologies inked a similar deal with AMD.

The two-year AMD-Alcatel contract was signed in 2000, when the industry was suffering through a dire shortage for flash memory. Bit shipments, or the amount of flash measured by the number of memory cells produced, more than doubled last year. This year, the situation has reversed. Flash memory is used in cell phones, telecommunications and other products.

AMD is No. 2 in the flash memory market and has signed similar deals with other major companies, such as Hewlett-Packard.

Alcatel builds networks for delivering integrated voice and data over the Internet. Representatives at the company's Plano, Texas, office could not be reached for comment.

News.com's Michael Kanellos contributed to this report.