The Taiwan semiconductor manufacturer, the second largest chipset maker after Intel, is using both the S3 and VIA brands on the new chipsets in an attempt to dodge legal trouble with Intel, motherboard makers have said.
The new range of Pentium 4 chipsets from VIA and others will allow the total price of a Pentium 4 system to drop by allowing the use of less expensive memory, which should help Intel to drive the processor into the mainstream. Chipsets are crucial to the design of a PC because they control the flow of data between the processor and other components such as memory, hard disk and graphics card.
The launch will see VIA first out of the gate with full production of a Pentium 4 chipset that supports low-cost PC-133 SDRAM memory. Also pushing similar products through are Silicon Integrated Systems (SiS), which is to begin volume production of the 645 chipset next month, and Acer Labs, which will launch its M1761 by the end of the year.
All three chipsets will pair Pentium 4 with both SDRAM, the standard memory today, and double data rate (DDR) SDRAM, a next-generation standard. Currently Intel's 850 chipset only allows Pentium 4 to use more expensive Rambus memory.
Intel will launch its own SDRAM-compatible chipset, 845, at the end of August, but will not offer a DDR-compatible product until next year.
VIA officials have said the company does not need a license to produce the chipsets, because of its recent purchase of graphics chip maker S3, which cross-licensed technology with Intel before it became part of VIA. However, Intel last week sounded a warning that unauthorized chipset makers would face lawsuits.
Industry analysts say that VIA's legal situation may be less ambiguous than it appears. "If they are infringing [Intel's patent], it wouldn't stop them from making chipsets," said IDC senior analyst Andy Brown. "They might be liable to pay a certain amount."
Last summer VIA reached an out-of-court settlement with Intel over Pentium III technology after a lengthy legal battle.
Rough with the smooth
Amid slack demand in the semiconductor industry, Intel is looking to roll out new Pentium 4 products as smoothly as possible. The company may be loath to delay the chipsets from VIA, which has been estimated to supply at least 40 percent of the chipsets for Intel processors.
Nonetheless, VIA is treading on dangerous ground. "You don't want to be too pushy with Intel either, and they shouldn't count their chickens," said analyst Brown.
Third-party chipsets are taking over more market share, partly as a response to Intel's production problems last year and partly out of pricing concerns. "VIA is certainly taking a much larger proportion of the market as vendors become less concerned with using Intel chipsets," Brown said.
Despite concerns that Intel may not be able to meet market demand for the 845 chipset, Brown said that the company has largely solved its manufacturing problems.
VIA declined to comment.