IT giant Intel will pay its closest rival AMD a total of $1.25b to put an end to a bitter protracted legal fight.
The two firms have been plunged into the anti-trust and patent dispute since 2005.
"While the relationship between the two companies has been difficult in the past, this agreement ends the legal disputes," both groups announced.
Now AMD and Intel have signed a cross-licensing deal which will last for five years.
Intel has had to adjust its Q4 financial expectations in the wake of the settlement. The firm now expects spending (to hit $4.2 billion, up from $2.9 billion, for the quarter.
Meanwhile, due to the magnitude of the deal and indeed the significant swing of fortune from one company to another, AMD shares surged after the announcement.
“We look forward to healthy competition with the mutual respect one would expect between world class competitors," said AMD CEO Dirk Meyer.
Both firms dominate the vast majority of the computer chip business, though Intel holds a highly dominant 80 per cent share of the market.