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AMD Reaches $12.1M Settlement In Bulldozer False Advertising Suit

'Is it worth it to chase down $35 per processor?' one distribution executive says of AMD's $12.1 million settlement for a class-action lawsuit alleging the chipmaker misled consumers on the number of cores in its Bulldozer processors.

AMD has reached a $12.1 million settlement in a class-action lawsuit alleging the chipmaker falsely advertised the number of cores in its Bulldozer processors.

The Santa Clara, Calif.-based company confirmed to CRN it has settled the lawsuit with plaintiffs Tony Dickey and Paul Parmer. The settlement is now awaiting approval before the U.S. District Court for Northern California in San Francisco. The deal, if approved, would release AMD of any claims.

[Related: AMD Disputes WSJ Story Claiming Chinese Joint Ventures Sidestepped U.S. Regulations]

“AMD is pleased to have reached a settlement of this lawsuit. While we believe the allegations are without merit, we also believe that eliminating the distraction and settling the litigation is in our best interest,” an AMD spokesperson said.

Businesses and individuals who purchased AMD's Bulldozer processors while residing in California or after visiting the chipmaker's website could be eligible for a part of the settlement, which would work out to $35 per chip if 20 percent of the settlement class files a claim, according to the plaintiffs' Aug. 23 filing in U.S. District court seeking approval of the settlement.

That is significantly lower than the advertised $266 and $221 price tags of the FX-8150 and FX-8210 processors, respectively, which are among the SKUs applicable for the settlement. The other impacted Bulldozer processors include the FX-8320, FX-8350, FX-8370, FX-9370 and FX-9590.

The plaintiffs argued in the filing that the settlement figure is "significantly more than 50 percent of the value of their certified claims had they prevailed at trial."

"Particularly given the risks and expenses that further litigation would pose in this case, this is an excellent result for the Class," the plaintiffs said.

AMD's Bulldozer processors launched in 2011, largely targeting content creators and gamers with high clock frequencies and cores. According to the lawsuit, the chipmaker advertised Bulldozer as the "world's first 8-core CPU," which the plaintiffs argued was not true because the cores were four modules that shared resources as opposed to eight independent cores that could perform calculations separately and simultaneously.

"The 'cores' in the Bulldozer line are actually sub-processors that cannot operate and simultaneously multitask as actual cores," the plaintiffs had argued.

The plaintiffs and AMD reached the settlement followed mediation attempts that started in 2016 and concluded with a full-day mediation on May 9 of this year. The lawsuit, which the plaintiffs filed in 2015, was certified for class-action status in January.

Kent Tibbils, vice president of marketing at ASI, a Fremont, Calif.-based distributor and AMD partner, said the settlement, if approved, means the court will not have to define what constitutes a core, which is potentially good news for the semiconductor industry.

"Maybe it's a good thing this got settled out of court, because if they didn't, it could create more confusion," he said.

He said the settlement will also help AMD focus on its new Ryzen desktop and EPYC server processors, which the chipmaker has boasted for having higher core counts against Intel's competing chips in the client and data center markets.

"They're riding a wave of positive press. They don't want something coming out going back eight years," Tibbils said.

The question now is, if the settlement is approved, who will actually go through the trouble of filing a claim, according to the distribution executive.

"How many did the average reseller sell of those chips way back in 2011, and what kind of paperwork do they have to pull out to prove it?" Tibbils said. "Is it worth it to chase down $35 per processor?"

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