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November 2, 1999

S3-VIA to Challenge Intel’s 810 With New Subsidiary

By CBR Staff Writer

By Dan Jones

Spurred by the success of Intel Corp’s 810 chipset, S3 Inc and Via Technologies Inc have formed a joint venture to develop chipsets with integrated graphics functions for the desktop and notebook market. Despite Intel’s early lead in this market – and a similar effort by ATI Technologies Inc and Acer Labs Inc – the joint subsidiary, tentatively dubbed S3-Via Inc, says it expects integrated graphics chipsets to be a major revenue generator in the future.

The company is sampling its first chipsets now and expects to have product on the market early next year. The first chipsets, intended for the desktop, will use S3’s Savage4 architecture and support Intel-compatible processors, according to Paul Crossely, PR manager at S3. He did not specify what these processors would be, but given the time frame they could be the ‘Joshua’ x86 CPUs from the Cyrix unit Via acquired earlier this year. Crossely said that S3-Via would be untroubled by the legal wrangling between Intel and Via itself, because S3 has a separate 10 year cross-licensing deal with Intel.

S3-Via says that it has already had interest in its products from two of the top five PC OEM manufacturers in the world. Its roadmap going forward has the company developing integrated chipsets for the notebook market and Advanced Micro Devices Inc’s Athlon processor.

Crossely is confident that despite the toehold Intel already has in this market with the 810, S3 and Via can compete – especially as Via is now the second producer of chipsets in the world, after Intel. Everyone has to be in bed with someone and we think we have the very best partner on the market. He expects that technology from the high standalone graphics chips that S3 produces will trickle down very rapidly to the integrated level. If the product cycle doesn’t follow the new product every six months upgrade cycle common to the 3D chip industry it will be as near as damn it says Crossley. He asks where Intel will source its graphics upgrade technology from, now that the company has junked its own standalone graphics chip efforts.

Now that S3 and ATI have both partnered with chipset manufacturers, 3Dfx Interactive Inc is the only major standalone 3D consumer chip vendor not to have taken the integrated route. The partnerships are vital to the vendors if they are not to lose a crucial chunk of the market to Intel. Indeed, Crossely expects that the trend will not be confined to the low-end of the PC market, hence S3-Via’s work on developing an Athlon chipset.

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