VIA goes embedded with motherboard division

The chipset and processor maker wants to get into video recorders and broadband set-top boxes with its new motherboard unit
Written by Matthew Broersma, Contributor

VIA Technologies is hoping to exploit the vast market for embedded devices like digital video recorders and set-top Internet boxes with its new motherboard division, which was announced at the beginning of this week.

The new division will also make higher-end boards that will couple with VIA's own Pentium 4 chipsets, which analysts say have been shunned by many board makers because of VIA's legal problems with Intel. The company said it is being careful not to compete with the manufacturers making motherboards based on VIA's core logic. "We are very much focused on products that our motherboard customers are not doing," Richard Brown, VIA's director of international marketing, told ZDNet UK.

VIA is the largest chipset maker after Intel, but has been involved in ongoing legal battles with its rival over intellectual property rights.

The decision to sell own-brand motherboards was generally seen as a manoeuvre to increase demand for VIA's P4X266 Pentium 4 chipset, which is at the heart of VIA's legal battle with Intel. VIA is understood to have outsourced all its motherboard production to Taiwanese and possibly Chinese manufacturers.

At the same time, the P4X266 has been adopted by some motherboard makers, including Elitegroup Computer Systems (ECS), VIA's major motherboard partner, and Shuttle.

Brown downplayed the high-end side of the motherboard market, saying the aim of the new division is to provide standardised infrastructure for lower-cost PC form factors and to push prices down. "As a silicon vendor, making chipsets and processors, you can only do so much," he said.

VIA has traditionally had a focus on low-cost computers, but so far the market has failed to take off -- partly because such stripped-down systems are usually not that much cheaper than a full-blown PC. VIA is now looking to put more energy into "embedded" devices, basically anything besides a PC, a market which includes everything from supermarket checkout terminals to set-top boxes.

This market is huge but fragmented, lacking the standardised infrastructure that has allowed the PC market to achieve such economies of scale.

VIA said it is currently talking with broadband suppliers about set-top boxes and is also targeting personal video recorders, which record television to a hard disk. "The value of the PC is moving very quickly from its ability to compute to its ability to connect," Brown said.

A key part of the strategy will be the P4M266 chipset, coming next month, which integrates graphics into the chipset to reduce system cost.

Brown would not comment on a VIA engineer's revelation at this week's Microprocessor Forum that the company is working on a 2GHz chip that mimics Intel's Pentium 4, but he did confirm that the chip will use Taiwan Semiconductor Manufacturing Co's (TSMC) .10-micron manufacturing process. "TSMC will move to that process and we'll move with them," he said.

The C5Z or CZA, as it is reportedly called, will not arrive until 2003 or 2004. In the nearer future, VIA will release the C5X and C5XL in the first quarter of next year, running at about 1.2GHz, Brown said.

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