The bitter chip patent dispute between Intel and Digital was resolved last week with chip giant Intel spending close to #1 billion to buy its way out of trouble. The agreement between the two companies involves the patent licensing and sale of Digital's troubled chip plant in Hudson, Massachusetts, in a contract worth $1.5 billion (#940 million) over the next seven years. The deal provides Digital with a way to get out of chip fabrication, which, according to analysts, has cost the company dearly. Digital has incurred huge costs from the Hudson plant, which has not been running at full capacity. Although Digital confirmed it would continue to invest in Alpha technology, the future of the Alpha is still in doubt. The company has also been silent over the future of the StrongARM processor, co-developed by Digital and Advanced Risc Machines (ARM), which is also manufactured at Hudson. Along with developing high performance machines based on Alpha, Digital said it would be offering a machine based on the Intel's IA-64 architecture, which is also designed for high-performance computing. Significantly, the company will be developing a version of its 64-bit Unix operating system for the IA-64 architecture, which puts a question mark over the future of similar systems based on the Alpha chip, according to analysts. "Intel's objective must be to get Digital to forget the Alpha altogether," commented Joe D'Elia, senior semiconductor analyst at Dataquest. A more immediate concern, added D'Elia, is the StrongARM which is used in the Acorn NC and handheld computers such as the Newton and a number of Windows CE devices. It competes directly with other processors in Intel's product family. Intel would not comment on whether the chip would continue to be manufactured at the Hudson plant.
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