Intel escalates threats to Via over P4 chipset

As expected, Via Technologies announced volume production of its chipset for Intel's Pentium 4 processor today. The chipset could lower Pentium 4-based system prices, since it is the first to allow Pentium 4 to use cheaper memory products, but it also looks likely to land Via in a fresh legal tangle with Intel.

Intel, for its part, is maintaining its hardline stance on Via's chipset: "It's clear that Via does not have a licence for the Pentium 4 bus interface," said an Intel spokesman today.

Via's recently acquired subsidiary, S3, has a 10-year licence to make Intel-compatible chipsets, and the Taiwan-based parent company believes that this gives it the right to manufacture the P4X266. Intel disagrees: "We do not believe that is the case," the spokesman said.

A chipset enables the processor core to communicate with other system components, like memory.

Controversy has surrounded the Via Apollo P4X266 since Via announced last year that it would go ahead with production whether it had a licence from Intel or not. At the chipset's debut, during the Computex Taipei trade show in June, Intel representatives were rumoured to be pulling down giant balloons promoting the product.

Earlier this month Chen Chun-shen, Intel's Asia-Pacific regional president, said that Intel would not hesitate to file lawsuits against companies like Via that make unlicensed Pentium chipsets.

Via has long had a turbulent and symbiotic relationship with Intel, but has escaped largely unscathed from previous legal wrangles. Last summer, for example, Via reached an out-of-court settlement with Intel, ending a battle over Pentium III-compatible products.

Some industry pundits hint that Intel might be reluctant to block Via's chipset from reaching the market at a time when semiconductor sales are at historic lows. Pentium 4 demand is expected to benefit from a chipset that can run industry-standard SDRAM and double data rate (DDR) SDRAM, rather than the RDRAM it relies on now. Intel's own DDR-compatible chipset will not be available until next year.

RDRAM prices have dropped since the Pentium 4's launch, but Via still estimates that RDRAM modules cost more than twice as much as DDR and PC133 SDRAM with similar capacity.

"With its support for DDR SDRAM, the P4X266 leads the Intel Pentium 4 processor platform into the mainstream market," said Wenchi Chen, Via's president and chief executive, in a statement.

Via is estimated to supply at least 40 percent of the chipsets for Pentium-based systems. Via is the world's second-largest chipset maker after Intel.

Via said that around 10 Taiwan motherboard manufacturers have agreed to use the P4X266 in their products, despite the legal ambiguity. Motherboard makers are said to fear that Intel will not be able to supply sufficient quantities of its upcoming 845 chipset, set for release at the end of this month.

"After [Intel's] performance, last year, there are a few concerns about it," said Andy Brown, a senior analyst with IDC. But he said that Intel has alleviated most of its production problems. "This year things are looking quite a lot better," he said.

Brown predicted that legal problems will have little effect on Via's Pentium products reaching the market. "Via will continue to make chipsets for the Pentium 4," he said.

Via is selling the new chipset for $34 each in OEM quantities, undercutting Intel's 845, which will reportedly sell at $38.

See Chips Central for the latest headlines on processors and semiconductors.

See the Hardware News Section for full coverage.

Have your say instantly, and see what others have said. Click on the TalkBack button and go to the Chips Central forum

Let the editors know what you think in the Mailroom. And read other letters.