VIA Technologies Inc (
VIA announced the release of the P4x266 chipset, which is designed for use with Intel Pentium4 chips. Chipsets act as a central nervous system in a computer, controlling the flow of data between the CPU, memory and other components. VIA introduced the product without the customary licensing agreement from Intel.
To that end, the two companies appear set to relive a battle fought last year over the right of VIA to make a chipset compatible with an Intel CPU without a license from Intel.
PHOTO: CHIANG YING-YING, TAIPEI TIMES
"We believe that we are not infringing on any Intel patents ... The license issue is a business consideration, not a legal one," said Ted Lee (
In order to create chipsets for use with Intel CPUs, companies generally negotiate a licensing agreement with the US-based multinational first.
Last year, VIA made chipsets designed for Intel's Pentium III CPU. VIA wagered the market would be receptive to a product that would be less expensive than Rambus-based memory chips. It shipped its new chipsets without a license and Intel sued.
"There were some legal actions and they have been concluded," Richard Brown, director of marketing at VIA said. "We were found not to have made any infringements on the [Intel] patents."
Via was forced to pay the licensing fee, however.
The gamble won big returns for VIA. The market snapped up VIA-made chipsets -- to the detriment of Intel's chipset business -- enabling the Taiwanese firm to capture a third of the global chipset market. VIA's revenues grew 171 percent to NT$31 billion (US$936 million) last year, and this year, the firm is looking for another memory-based win.
Pentium4 chips are currently only found with Rambus memory, but VIA -- and the worldwide memory chip industry -- have a less expensive alternative, called DDR memory. Analysts say that because of its contract with Rambus Inc, Intel is not allowed to produce chipsets compatible with DDR memory until 2002, which gives VIA a five-month head start.
To slow VIA down, Intel has refused to issue a license for the new chipset, said one analyst who requested anonymity. The company has gone so far as to warn motherboard makers in Taiwan against using VIA's P4x266 chipsets.
In response, Taiwan's top motherboard makers, Asustek Computer Inc (華碩電腦), Gigabyte Technology Co (技嘉科技), Micro-Star International Co Ltd (微星科技) and Elitegroup Computer Systems Ltd (精英電腦), have all acquiesced to Intel, and plan to wait until Via acquires a license before putting VIA chipsets on their motherboards. VIA, however, says business is humming.
"We are starting to ship to various motherboard manufacturers in Taiwan," Brown said.
He also pledged that VIA would "indemnify [motherboard and other component makers] against any kind of suit that would be incurred should Intel decide to go along that route."
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