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Taiwan-based media has reported that Via Technologies, a former leader of the core-logic market and now a struggling designer of chipsets for personal computers, was in talks with Intel Corp. about prolongation of a license for Intel’s processor system bus, under which the company can sell chipsets featuring support for Intel’s latest central processing units (CPUs).

Under the terms of the license agreement signed in 2003, Via has rights to develop and sell chipsets for Intel processors till April, 2007, however, the company may not release any new chipsets starting from that time and sell the existing inventory till April, 2008. Given that Intel is about to release microprocessors with 1333MHz processor system bus, Via needs to obtain a license to develop appropriate core-logic, perhaps, with support for high-speed dual-channel memory.

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.

Still, getting back to the mass market of Intel-compatible chipsets is important because in the year 2007 and beyond there will be no at least one competitor there: ATI Technologies, graphics product group of AMD, will cease to develop and eventually sell chipsets for Intel processors starting this year. At the same time, AMD’s chipset division will be far more aggressive in future, which will mean that there will be much less space for Via in the market of chipsets for AMD processors. This essentially means that Via’s chipset division is doomed, unless the company manages to accelerate the roadmap of chipsets for the forthcoming Intel microprocessors.

In November it was reported that Via Technologies decided to restructure itself in an attempt to strengthen its efficiency and competitiveness and now consists of three core business groups – CPU Platform, System Platform and MCE (Multimedia Consumer Electronics). Via Technologies is reportedly responds to new market realities, when Advanced Micro Devices and ATI Technologies effectively become one company and Intel is more and friendlier with companies like Nvidia Corp. and Silicon Integrated Systems Corp. 

Officials for Via and Intel did not comment on the news-story.

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