Oregon Public Broadcasting

Intel and its arch rival, Advanced Micro Devices, ended one of the computer industry's most bitter legal wars Thursday.

As Kristian Foden-Vencil reports, Intel will pay AMD $1.25 billion to settle a long-running antitrust and patent dispute.

For years AMD has charged that Intel has blocked computer makers from purchasing its chips by lowering prices and offering rebates.

Such business practices are legal in a market with a lot of competition. But there are only two big chip manufacturers and Intel has an 80 percent market share -- meaning it essentially has a monopoly.

The head of AMD, Dirk Meyer, says the settlement marks a new beginning for his industry.

Dirk Meyer: "We recognize that it will take time for people to understand how operation conditions in the processor business have changed -- but make no mistake, they have changed."

A spokesman from Intel says the settlement allows the company to focus on developing new and innovative products instead of legal maneuvering.

The effect of the settlement on two similar legal battles Intel is fighting in Europe and New York, is unknown.