Strong sales of chipsets made for use with Intel Corp's Pentium4 computer microprocessors lifted Silicon Integrated Systems Corp (SiS, 矽統科技), the second-largest chipset maker in Taiwan, to its first quarterly profit in two years, the company announced yesterday.
Sales at SiS rose by 49 percent compared with the same period last year to NT$3.58 billion (US$94 million). The company posted a profit of NT$26 million (US$747,000). During the same period last year, SiS ran a NT$207 million loss.
"SiS's sales are improving and that means VIA Technologies Inc's (
SiS obtained a license from Intel, allowing it to produce chipsets that work with Pentium4 chips, while VIA has not. Chipsets control the flow of data between the processor and other chips in a computer, including memory and graphics chips.
VIA captured nearly 40 percent of the global market for chipsets between 1999 and 2001. The company made huge strides by marketing chipsets that allowed computer users to choose what kind of memory chips they wanted in their computers.
Intel had wanted consumers to use only Rambus-based memory chips, a much more expensive kind of memory than what VIA markets.
The two companies have been locked in legal battles ever since. Last year, Intel denied a Pentium4 license to VIA and effectively locked the company out of a large share of the market by threatening other computer parts makers with lawsuits if they used any unlicensed VIA-made products.
VIA retaliated with anti-competitive and technology infringement lawsuits against Intel, and by launching a new arm of its company to produce computer parts necessary to get its P4 chipsets back into computers. VIA has not yet obtained a Pentium4 license from Intel, the company said yesterday.
But squabbles between VIA and Intel have allowed SiS to stage a comeback. The company launched its Pentium4-compatible chipsets late last year and has since expanded its share of the chipset market by 16 percent, according to analysts.
"Our most essential product is the Pentium4-based chipset," said Samuel Liu (
Nevertheless, SiS believes sales of PentiumIII-based chipset products will remain strong in the second quarter but will taper off in the third, as Pentium4 chips take over the market.
Entrust's Wang said the loss of PentiumIII revenue would hurt VIA more than SiS because of the licensing squabbles.
SiS also said it will ramp its recently launched low-end graphics card, the Xabre, in the middle of May, and offer it as an alternative to nVidia's GeForce graphics cards.
The company plans to spend NT$2 billion on new plants and equipment this year.
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