The Inquirer reported today (referring to "Taiwan Economic News") that VIA and SiS seem to be acting as if they had agreed upon it: they both dropped the prices of their chipsets for Pentium 4 processors (VIA P4X266A and SiS645) down to $20 per unit. In fact, SiS shipped its SiS645 chipset to the large mainboard manufacturers for $20 per unit instead of $25 from the very beginning. There also existed some discounts for the other manufacturers. That is why the changes are not that tangible for this company. For VIA the situation is a bit different. The company has always maintained a certain price gap with the competitors, selling its chipsets at higher prices than SiS and at considerably lower price than Intel. But as for the Pentium 4 chipsets, the company had to give up the usual strategy for two major reasons: firstly, the new P4X266A solution wasn’t always faster than SiS645, and secondly, P4X266A is formally illegal, while SiS645 doesn’t suffer any problems of the kind.
Of course, this price drop is a very pleasing fact for the customers, because it means that there will be cheaper mainboards coming soon. However, the Taiwanese manufacturers will hardly be happy with this damping. The production cost of SiS645 chipset is around 415, and that of P4X266A – a bit higher (because of TSMC’s participation), which doesn’t promise any high revenues to the manufacturers (just for a better comparison: i845 B-Step chipset is selling to the mainboard makers for $36-$38 per unit). But is there anything you won’t do in order to win a bigger part of the chipset market for promising CPUs?...