X-bit labs

Via Technologies Reassures Its Strategy, Denies Split Plans.

Category: Chipsets

by Anton Shilov

[ 05/21/2007 | 06:31 AM ]

Via Technologies, a struggling designer of chipsets and central processing units (CPUs), has again reassured its corporate strategy directions and denied earlier reported plans concerning possible split of the company into several units. Meanwhile, the situation with cross-licensing deal with Intel, a crucially important business agreement for Via, remains unclear.

After the most-recent restructuring, Via Technologies consists of three core business groups: CPU Platform, System Platform and MCE (Multimedia Consumer Electronics). Some sources in Taiwan implied that such a restructuring may ultimately mean spin-off the microprocessor and/or chipset groups into standalone companies, enlisting new investors from mainboard makers and semiconductor foundries, so to ease negotiations with Intel Corp. about chipset bus license, as the latter company reportedly has negative attitude to Via’s CPU business.

According to a report of referenced to Economic Daily News (EDN) by DigiTimes web-site, Via has dismissed speculations that it may spin off its CPU and chipset businesses in order to receive license on development and selling chipsets compatible with microprocessors by Intel Corp.

Under the terms of the agreement signed in early April, 2003, Via Technologies received a four year license to design and sell chipsets that are compatible with the Intel microprocessor bus and sell those chipsets for a fifth year without infringing Intel’s patents. However, starting from April, 2007, Via has no rights to roll-out new chipsets supporting processors by Intel, unless a new licensing deal is inked.

Via’s competitor in Taiwan, Silicon Integrated Systems Corp., has recently signed an agreement with Intel, under which it can develop, manufacture and sell core-logic sets for Intel processors supporting 1333MHz processor system bus as well as quad-core central processing units (CPUs). But SiS has different licensing strategy than Nvidia Corp. and Via: SiS makes agreements concerning every new processor system bus (PSB) speed-bin, whereas Nvidia and Via prefer broad, multi-year patent cross-license agreements across multiple product lines and product generations along with the PSB license.

For Via, whose sales dropped from a little lower than one billion of dollars back in 2001 to about $650 million in 2006, it is important to obtain the license to make chipsets for Intel’s microprocessors. But it might not be really crucial for the company’s revenue though. Via’s overall chipset market share has been decreasing for years now, but the company’s sales remained in the range of $600 million (partially because of gradual drop of U.S. currency on the international markets) and even increased a bit in 2006 due to success of Via’s processor and application-specific chip business. Nevertheless, chipset business remains attractive for the company for several reasons.