A VIA Technologies Inc (
"Clock speed won't increase demand any more," Richard Brown, an associate vice-president at VIA Technologies, said.
Users are holding on to their PCs much longer because they don't need more speed, he said.
Brown said that the industry needed to stop "blindly focusing on speed" and start looking at ways to re-invigorate the sector. He named three "areas of excitement" that VIA is concentrating on: broadband computing -- both fixed and wireless -- digital media, and design innovation.
"Design innovation will be the key driver for demand in the future," he said.
He cited the example of Dell Computer Corp's chairman and CEO who launched a new compact PC in Japan on Monday.
"Michael Dell announced a small form factor PC in Japan," Brown said. "He didn't announce a 1GHz, 2GHz or 3GHz system. This is a very clear sign of future trends," Brown said.
A computer chip's performance, or clock speed, is measured in how many tasks or cycles it can perform each second. One megahertz equals a million cycles per second. One gigahertz is a billion cycles per second.
The world's largest designer of computer chips, Intel Corp, broke the 1GHz barrier last summer.
The market has been led by manufacturers with faster chips. But future demand may soon revolve around DVD performance, high-quality audio, easy connection to the Internet and a host of other features, Brown said.
Such computer/electronics products will at first be designed for home use.
Brown's marketing colleague, Ben Boyden, demonstrated the new concept in a Hi-Fi PC. The unit is a metallic cube with a glass door on the front panel. Using a remote control, Boyden was able to play a music CD and a DVD. He then clicked another button to boot up Windows XP so that he could access traditional computing functions.
The Hi-Fi PC is based on a VIA C3 processor with a 533MHz clock. In a comparison of DVD playback performance conducted by VIA, the C3 achieved almost the same quality as Intel's Pentium 4 with a 1.7GHz clock speed.
Boyden said that the Hi-Fi PC will retail for between US$700 and US$800.
Although VIA will not manufacture the PC, it has developed the components that other manufacturers can use to develop their own systems. VIA already has buyers that are ready to deliver Hi-Fi PCs to retailers in the first quarter next year.
The Hi-Fi PC was demonstrated during VIA's third-quarter investor conference yesterday.
The company could do with a boost in income.
Despite an increase in sales revenue of 16 percent from the second quarter, the company's profits fell 3.7 percent. It shipped NT$6 billion in products, but only made NT$44 million net income. This is only 5 percent of last year's third quarter profit.
Cumulative figures for the first three quarters show a profit less than a third last year's.
VIA's profits fell after Intel Corp inundated the market with cheap chipsets that it couldn't sell after a slump in the PC market.
VIA is locked in legal battles with its largest rival Intel over alleged patent violations.
Intel won a lawsuit yesterday in Germany that will bar VIA's chipsets that work with Intel's Pentium4 processor from being sold in the EU nation.
Intel's lawsuits against VIA in the US, the UK, Singapore and China have yet to be resolved.
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