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S3, Via form graphics chip set alliance against Intel

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CIOL Bureau
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Going up against Intel in a key IC market is a challenge few companies take on. But, that is what graphics chipmaker S3, located almost next doors to Intel in Santa Clara, and Taiwan’s Via Technologies announced they will do. The two companies said they have formed a new joint venture, S3-Via and the unit has already begun showing and selling potential customers their new integrated high-end graphics chipsets. S3-Via’s chip sets combine S3’s highly acclaimed "Savage 4" graphics IC with Via’s top-of-the line PC chip set, thus lowering the overall cost of a PC and making its design more compact. Analysts said the S3-Via product appears a potentially formidable competitor for Intel’s graphics chip sets as they are less costly and offer higher performance.



"Intel has let its graphics technology slip from leading edge to trailing edge. Intel’s product isn’t bad, but the S3-Via product appears to be much better and will cost just nominally more," said Rob Enderle at Giga Information Systems, a Silicon Valley based high technology market research company.



Analysts said the S3-Via joint venture is likely to take its battle with Intel to a whole new level soon. Via, one of the world’s leading chip set makers, recently acquired the Cyrix processor technology from National semiconductor and the Winchip processor from Integrated device Technology (IDT), two Pentium-compatible processors. That would allow the joint venture to offer an integrated PC chip set complete with CPU and graphics processor.



In yet another intriguing twist, both Via and S3 have bitter memories of dealing with Intel and may be eager to give Intel a run for the money. Intel recently dumped VIA as a second source for its chip sets, canceled a cross licensing agreement and filed a patent infringement and lawsuit against the company. And S3 had first planned to launch a graphics PC chipset back in 1995. But Intel pulled the legal rug from underneath the company by refusing to license S3 a key technology. S3 lost tens of million of dollars in R&D expenses on the chip set project.

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