VIA Technologies has announced their second quarter financial results that appear to be even worse than the most pessimistic analysts could have expected. Although the reasons of this Taipei-based chipset-maker`s failures are fairly and squarely clear, their end-results are astonishing.

VIA`s net sales decreased about 30% to NT$14.4 billion (US$428 millon) during the first half of the year and earnings for the second quarter plummeted 95% to NT$46 million (US$1.4 million) compared to the same periods last year. Revenue for the second quarter was NT$5.2 billion (US$152.9 million), far below analysts` estimates. The EPS (Earnings Per Share) reached NT$0.05, whereas a year ago this value was NT$1.08.

Seeing continuous sales slump in the first two quarters and comparatively weak first half of the third quarter, Ted Lee, vice president of world-wide sales and marketing at VIA, decided to retire from his current high post, not leaving the company, though.

This year has been quite tough for VIA so far. As the company still has not secured their license on Pentium 4 system bus, a lot of their partners decided not to use appropriate core-logic products from this chipset-developer due to the pressure from Intel. At this point VIA had to offer extremely attractive prices to their remaining partners and such strategy causes their gross-margins to slide down further. Moreover, this year Intel and SiS have become very aggressive, providing more and more advanced products sometimes even cheaper than VIA. Due to broad product families from these two companies, their market share has risen gradually, meanwhile VIA`s market presence continues to decrease both among Socket 478 and Socket A platforms.

Meanwhile, VIA`s CEO, Wen Chi Chen, told during the recent conference-call that the company is still confident in their strategy and is not going to license Pentium 4 system bus. He added that his company did not need Pentium 4 license, but if Intel wanted, the latter could try to convince VIA to secure it. The Taipei-based core-logic developer now hopes to enhance its profitability with its diversification strategy.