The three-way battle for chipset supremacy in Taiwan entered a new phase yesterday as the share prices of Silicon Integrated Systems Inc (SiS,
SiS and Acer Labs have long played second fiddle in Taiwan to VIA, which controls nearly a third of the US$3 billion market for chipsets. Over the past few months, however, SiS won orders with a chipset made for Advanced Micro Devices (AMD) microprocessors and along with Acer Labs, claimed to have obtained Pentium4 licenses from Intel while VIA had not.
Chipsets control the flow of information between the CPU and the rest of the computer. In order to create chipsets for use with Intel CPUs, companies generally negotiate a licensing agreement with the US-based company first.
Fears the Pentium4 licenses would help the two upstarts steal market share from VIA, along with disappointing revenues, dragged VIA shares down 23 percent last month.
Yesterday, VIA struck back with a new chipset for use with AMD chips -- to the detriment of SiS -- and industry pundits said Pentium4 chipsets made by Acer Labs and SiS are not ready for the market yet. VIA's Pentium4 chipset was launched two weeks ago, despite the fact Intel has refused a license.
VIA's stock rose 3.6 percent to finish the day at NT$174 per share yesterday on the Taiwan Stock Exchange. Shares in both SiS and Acer Labs plunged yesterday. SiS shares dropped the market limit 7 percent to NT$32.7 and Acer Labs shares fell 5.2 percent to NT$31.1.
Pentium4 compatible chipsets made by SiS and Acer Labs are not ready for the market yet and Acer Labs might not even have the appropriate Intel license for these chipsets, according to Thomas Pabst, CEO of Tom's Hardware Guide, one of the most popular computer parts review Web sites on the Internet.
Pabst said his firm has yet to see Pentium4 chipset samples from the two Taiwanese companies, indicating the chipsets are not yet ready for the market.
Samsung associate director Mian Quddus, however, said his firm is already testing Pentium4 chipsets from SiS and Acer Labs to make sure they work with its memory chip products.
VIA, by contrast, claims it is shipping its Pentium4 chipset in volume already despite the Intel licensing problem, and Tom's Hardware Guide has already published positive reviews of the product. VIA's new KT-266A chipset made for use with AMD processors also beat out a SiS product which had won heavy orders for that firm over the past few months, according to Pabst.
Whichever Taiwanese firm can ship its Pentium4 compatible chipset in volume over the next three months stands to win big in the chipset business this year. The three firms have all developed Pentium4-compatible chipsets that can be used with DDR memory chips, which are two to three times less expensive than the memory chips currently used with systems that include Pentium4 processors.
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