Traditionally Intel Corp. requested third-party core-logic designers to pay it licensing fees for chipsets compatible with Intel processors. But that may change, according to some reports and in a bid to solidify its positions in the desktop market the world’s largest chipmaker may cease collecting royalty from Taiwanese chipset developer Silicon Integrated Systems Corp.

A news-story by DigiTimes that cites Chinese-language Commercial Times news-paper claims that Intel will drop the $1.50 royalty charge per chip in order to “help maintain its dominance in the entry-level PC chipset market through third-party players”. Intel Corp. is projected to stop collecting licensing fees from SiS starting early 2006.

In case the report is correct, SiS will be in a more competitive position that it is today, as typically value and mainstream chipsets cost from $15 to $25, which means that a drop of $1.50 per device is a significant decline in pricing SiS can offer its clients. Intel, on the other hand, will be able to sell more processors on the markets due to availability of additional cost-efficient platforms in various markets.

According to Mercury Research, shipments of PC chipsets based on the Intel platform are estimated to slide to 39 million units in the fourth quarter of this year, while the non-Intel chipset segment grew 37% sequentially to 34.7 million units.

Neither Intel Corp. no SiS officials commented on the news-story.