A new chipset launched at Computex Taipei 2001 yesterday by Nvidia Corp, a US-based firm, will bring desperately needed orders for Taiwan Semiconductor Manufacturing Co (台積電), but for Taiwan's VIA Technologies Inc (威盛電子), the new chipset means tough competition ahead.
Nvidia, a top maker of graphics chips, launched its latest product yesterday, the nForce line of graphics chipsets.
Chipsets regulate the flow of data between the main organs of a computer, like the microprocessor and memory chips.
The new nForce graphics chipset, however, adds high quality imagery and Dolby digital sound to the equation.
Based on the graphics chip design used in Microsoft's new Xbox game machine, Nvidia's new chipset makes possible Jurassic Park-quality graphics on a desktop computer, promising superior photo, 3-D, video and other images at a lower price.
With the graphics chip functionality placed right on the chipset, computer makers should be able to save hundreds of dollars per computer on graphics cards, sound cards and other components now rendered unnecessary by nForce.
The company also tapped Taiwan's leading semiconductor foundry, TSMC, to manufacture the chipsets.
According to Tony Tamasi, director of desktop product management at Nvidia, TSMC will begin mass production of the chips in July or August using a 0.15 micron technology etching process. TSMC will also reportedly make the Nvidia graphics chips slated to fill Microsoft's Xbox.
Although the new graphics chipset means new orders for TSMC, the high-powered product is expected to compete with VIA Technologies. The company just released its own graphics chipset, the VIA Apollo KLE133, for use with Advanced Micro Device's (AMD) Duron processors on value PCs.
The new Nvidia chipset, developed through the use of AMD technology, will give the VIA chipset a run for its money.
"We'd like to see [the nForce] in our full range of products," said Rex Meek, director of applications and technical support at AMD.
The nForce chipsets only work with AMD's Athlon and Duron chip families.
Nvidia needed AMD technology to complete the puzzle of putting its graphics expertise on a chipset, and now Intel will have to wait for the graphics chipset to be made Intel-friendly.
This news is especially hard hitting since AMD is VIA's number one customer. VIA currently produces between 70 percent and 85 percent of AMD's chipsets, according to Chris Hsieh, semiconductor analyst at ING Barings in Taipei.
"AMD is a huge source of revenue" for VIA, said Hsieh. He estimated that the firm accounts for nearly 70 percent of VIA's revenue.
Newspaper reports in Taiwan indicate VIA is looking into possible legal action over the issue. Some of the chipset technology AMD transferred to Nvidia reportedly came to AMD through VIA. VIA reportedly plans to sue Nvidia for using the technology without authorization.
"We haven't been contacted by VIA ... we are not aware of any infringements," said Nvidia's Tamasi.
Although some argue Nvidia did not have the technology to meld graphics chips to chipsets in such a short time-frame, analysts said VIA would not likely sue the firm for fear of angering AMD.
"The possibility of VIA suing Nvidia is probably very remote," said Hsieh.
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