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Once there were was numerous designers of chipsets for personal computers on the market, including Ali, Intel, Opti, SiS, Via Technologies and several more, but as Intel Corp. started to aggressively penetrate the market of core-logic sets for its processors in the late nineties, numerous third-party chipset designers had to leave this market. ATI’s chief executives thinks there will be three PC chipset designers in total in several years.

Dave Orton, the chief executive of ATI Technologies, who is relatively new chipset player, said in an interview with The Inquirer web-site, that n a couple of years time there will be two third-party chipset left ATI and Nvidia Corp. in addition to Intel Corp.

According to Mercury Research, there were 67.3 million chipsets shipped in the first quarter 2006, meanwhile, according to a report from Jon Peddie Research 34.6 million graphics cores for desktops and 14.1 million graphics controllers for notebooks were integrated into chipsets. While the numbers from different companies should not be compared directly, it can be estimated that the majority of chipsets on the market – about 48.7 million featured built-in graphics cores.

Given that the demand towards high-performance graphics is only going to rise in future, Mr. Orton believes that as ATI Technologies’ and Nvidia Corp.’s “natural business” is development of high-speed standalone graphics processing units, other third parties would not be able to offer as powerful graphics cores, as the two graphics companies.

Other sources surveyed by The Inquirer, said that company like SiS has a competitive advantage too: being partly owned by United Microelectronics Corp. (UMC), the company may produce its chips at much lower cost than ATI or Nvidia. S3 Graphics, which is owned by chipset designer Via Technologies cannot develop a high-performance chip for desktops, however, it still has abilities to create built-in graphics cores with competitive feature-set.

But the market trends actually proof the words of Mr. Orton. A recently-released report from Mercury Research claims that Intel Corp. has maintained its largest market share of 57%, down significantly from the Q1 2005 as a result of its withdrawal from entry-level chipset market, Via Technologies was commanding 15% of the core-logic market, down 1% sequentially and flat annually. ATI Technologies, whose market share was only 3% a year ago, could boast with 12% share in Q1 2006 and become the world’s No.3 chipset provider. Meanwhile both Nvidia Corp. and Silicon Integrated Systems supplied less chipsets than in the prior quarter and had 9% and 6% market share, according to the report.


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