Intel Corp now has the graphics chip market firmly in its sights, and yesterday acquired San Jose, California-based Chips & Technologies Inc for $420m. Chips & Technologies, which started off as a supplier of core logic chips for personal computers back in 1984, has more recently forged a new business supplying 2D graphics accelerator chips to notebook suppliers such as Matsushita Electric Corp’s Panasonic, Toshiba Corp and Digital Equipment Corp. It’s also one of the key players behind the Auburn graphics chip Intel is working on with Lockheed Martin Corp’s Real3D division (CI Nos 2,913, 3,154) and has been working with Real3D and Intel on the 2D portion of the chip. The move is a worrying one for others in the PC graphics market, given the number of motherboards Intel manufacturers, creating a captive market. But using the Accelerated Graphics Port and tying in with Intel’s MMX multimedia extensions, Auburn is likely to be positioned at the high-end of the PC market – and the latest word is that it won’t now be hitting the market until some time next year. Chips & Technologies will be integrated into Intel’s Graphics Component division, and for the time being will retain its name. Under the terms of the agreement Intel is to commence a cash tender offer for the company to all outstanding shares of Chips & Technologies at a price of $17.50 per share. Over their long histories, the two companies have had their legal battles, but finally settled up their grievances through a cross licensing deal for key patents in 1993. Bruce LeBoss, a spokesperson for Chips & Technologies said Intel had watched as personal mobile computers began to catch up with the graphics capabilities of desktop models. The decision to sell out to Intel become blindingly obvious as time progressed, he said. All 260 staff are expected to retain their positions and it will be pretty much business as usual. Chips and Technologies has just reported its fiscal results for the year to June 30 that saw net profits increase $40.6% to $36.2m and an 11.6% rise in revenue to $168.3m
