Thanks to Moore's Second Law (complexity causes costs to scale exponentially) competition in the semiconductor business is held in an ever-thickening mud, which represents the cost of building new capacity.

The number of company-owned fabrication plants, or fabs, must decline over time, as their cost rises above even corporate affordability. The decision to build one must be taken with increasing care, with an eye toward a far-off future. It's the opposite of what happens in the product cycle, at the other end of the factory floor, where things are constantly accelerating.

While Intel has played its hand in Asia, AMD has chosen Europe, specifically the former East Germany. More specifically Dresden, firebombed during World War II, left for dead during the Cold War.

In 2003 AMD broke ground for its second Dresden Fab, AMD 36. The plant goes into volume production next year, at a point where AMD's designs seem to be excelling those of Intel.

Market share, in other words, could make a big swing next year.

At the very same time, AMD is advancing in court, forcing Intel to defend an already-fading monopoly. A few years ago Intel had knocked AMD practically out of the ballpark. With the Dresden Fab 36 that won't be true, but AMD figures Intel must still have a case to answer for, because its hyper-competitive marketing department never changed tactics.

Evidence will likely show that Intel did have a near-monopoly under Craig Barrett, and that it did abuse its position in its dealing with big customers. But a court finding for AMD would still be a mistake.

Judges could not catch up with change in the software business, so politicians became leery of seeking any antitrust remedies in the technology area. This reluctance, and AMD's weakness, prevented redress from being sought when it could have done some good. The process began only after AMD could afford to make it start, when its comeback was already underway, when its technology had become superior and the Dresden plant was under construction.

At this point, with a decision possible in 2007-2008, AMD's suits look counter-productive on many levels.

1. They waste the time of AMD's own lawyers.
2. They would result in redress just as AMD is regaining competitive stature.
3. Both sides face a challenge from China, which I guarantee will come out with its own designs soon, and whose lower costs can blow both chip-makers out of the water very, very quickly, if given a chance.

Wisdom dictates that the European Community, where the Dresden fab is located, seek a settlement that could then be extended to the U.S. market. Such a process promises an end to litigation at the point where AMD starts grabbing market share. The present course is a disaster, for AMD, for Intel, and for the U.S.