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Intel Faces Investigation By S. Korea

Posted on: Tuesday, 9 August 2005, 15:00 CDT

Intel Corp., the world's biggest maker of computer chips, said South Korean regulators are investigating the company's marketing and rebate programs.

The probe, disclosed Monday in a regulatory filing, builds on cases in Europe and Japan that seek to determine whether Intel hurt competition by preventing clients from buying other chips. Japanese officials told Intel to remove exclusive clauses from contracts in March. Regulators raided Intel's European offices last month.

"Intel has been an aggressive marketer for as long as I can remember, and I wouldn't expect them to change that approach," said Kevin Vassily, an analyst at Susquehanna Financial Group in San Francisco. He has a "positive" rating on Intel's stock.

The Korea Fair Trade Commission, which overseas competition in Asia's third-largest economy, in June requested documents related to local marketing practices, Intel, which is based in Santa Clara, Calif., said Monday in a regulatory filing. Intel's chips run 80 percent of the world's personal computers.

Intel has about 350 workers in Riverton.

Shares of Intel fell 6 cents to close at $26.71 Nasdaq Stock Market composite trading. The stock has gained 14 percent this year.

"We cooperate with regulators when they request information and are in the process of doing so," Chuck Mulloy, an Intel spokesman, said Monday.

Intel's largest rival in microprocessors, Advanced Micro Devices Inc., filed a U.S. antitrust lawsuit in June. The company said it has identified 38 companies including Dell Inc., Sony Corp. and Toshiba Corp. that Intel has coerced into exclusive contracts.

Intel offers PC makers subsidies for advertising campaigns that feature its "Intel inside" logo to bolster sales of its Pentium computer chips.

Legg Mason Wood Walker analyst Cody Acree in Dallas said Intel may be more cautious in how the company deals with its customers and that it will be difficult for analysts to spot any changes.

"We would expect, as with any company, they have to be a little more careful when they are being scrutinized, even if they're not doing anything wrong," he said.

Advanced Micro had 15.8 percent of the market last year even as the company beat Intel by being first to unveil some new kinds of chips.

Source: Deseret News (Salt Lake City)

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