Intel and Broadcom have agreed to put their legal differences aside, but the settlement of the lawsuit filed by Intel three years ago will cost Broadcom $60m (£37m).
In addition to the cash settlement, to be paid out later this year, Broadcom and Intel have entered into a cross-licensing agreement that covers nearly all of the patents held by either company through to 7 August 2008.
The agreement gives both Broadcom and Intel "design freedom" to bring products to market without having to worry about patent claims, said Peter Andrew, senior director of investor relations at Broadcom.
The two companies have been involved in numerous patent lawsuits regarding technologies such as video compression, networking chips and chipsets over the last three years. This agreement will dismiss all claims with prejudice, which means they cannot be brought up again in the future.
Broadcom will take a one-time charge for the payment when it reports quarterly earnings results next week.
Tom Krazit writes for IDG News Service