A fifteen-year-old technology cross-licensing agreement between Intel Corp and National Semiconductor Corp appears to have given NatSemi crucial rights to use Intel’s proprietary new ‘Slot 1’ chip to motherboard connection and P6 bus, should the PC industry move to adopt Intel’s technology as standard. That scenario would leave Advanced Micro Devices Inc, Intel’s main competitor, standing entirely on its own as it tries to generate motherboard and core logic support for its alternative ‘Slot A’ connection and the Alpha 21264- derived 200-MHz bus system. Slot A is central to AMD’s future because it will house the K7 processor, hyped as being a serious Intel beater and due to hit volume production in the second half of 1999. Currently a poor third, NatSemi’s Cyrix microprocessors are shipping in far smaller volumes than chips from the number one and two players, Intel and AMD. But on a recent conference call to announce NatSemi’s second quarter results, chief executive Brian Halla made it clear that his company was putting serious fabrication capacity behind Cyrix in order to grab market share in the sub-$1,000 PC category. And he implied that future gains in market share may depend heavily upon following Intel’s lead with Slot 1 and the P6 bus which supports it. We are able to move with Intel and the traditional PC market to the Slot 1 socket, which is very important in terms of customers that are trying to plan long-term relationships. They are keenly interested in our ability to participate here, Halla said. Intel regards Slot 1 as part of its crown jewels according to one spokesperson. And the Santa Clara-based giant has been heavily criticized for its plans to leverage its market dominance by pushing Slot 1 as the new standard while also controlling who the technology is licensed to, effectively squeezing out its competitors via control of the motherboard connection rather than with superior processor power. The predecessor to slot 1, Socket 7, was widely licensed but it is now incapable of supporting the advanced clock speeds of the latest chips. And while Intel has no intention of giving its crown jewels to either of its arch rivals, NatSemi’s age-old cross licensing deal (grated in exchange for some chip packaging designs in the early eighties) puts it in an unusually advantageous position. Intel will never hand over the technology, but NatSemi has the right to reverse engineer it if it so chooses. AMD claims that it’s own 200-MHz alpha bus is superior to the P6/slot 1 technology, but the problem comes when motherboard and core logic manufacturers have to support multiple configurations. However, AMD’s head of corporate communications, Scott Allen, says that if the PC manufacturers want the K7, then the major motherboard makers such as Taiwan’s VIA Technologies Inc (one of the few be have been granted a license for Slot 1 by Intel) will have to support it. AMD has already licensed the Slot A chipsets royalty-free to about six companies.
