Chipset maker expects bigger mainland role

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Last updated at: (Beijing Time) Monday, February 16, 2004

Chipset maker expects bigger mainland role

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Taiwanese electronics company VIA Technologies Inc has shrugged off the impact of its legal dispute with the world's biggest semiconductor maker Intel and will put more resources into the fast-growing Chinese mainland market, said a company executive.

"After a difficult time in the past two years, we are on the fast track again on the Chinese mainland," said Frank Jeng, marketing director for VIA Technology's Asia-Pacific region, in a telephone interview.

The company, once the world's biggest chipset maker, was accused of patent infringements in September 2001 by the US giant Intel and after that, VIA stopped making Intel-architecture-based chipsets for computer motherboards.

Last April, the two companies settled their disputes and VIA was allowed to make chipsets based on Intel's processors.

Jeng said many main board makers began to accept VIA chipsets again after the end of the legal disputes, which boosted the Taiwanese company's sales on the Chinese mainland.

VIA, once the biggest chipset maker on the Chinese mainland with about 60 per cent of market share, saw a sharp decline to as low as 20 per cent after the lawsuit.

But, by the end of last year, VIA's market share had already recovered to more than 30 per cent, according to Jeng.

The Taiwanese electronics company aimed to expand it to as much as 50 per cent this year.

This goal, however, is challenged by some industrial analysts.

"The settlement will surely help VIA Technology, but it may be very difficult to regain its past glory," said a senior writer with the industrial newspaper IT How-Why in Beijing, who declined to be named.

Intel has also been gaining a stronger foothold in the mainboard market to better promote its processors and isolate its competitors like AMD.

Intel can easily shift that advantage to other products like chipsets and mainboards with its dominant influence on customer processor purchases.

VIA has realized this and will introduce more new products to avoid being too concentrated on the chipset business.

The Taiwanese company has formed an alliance with US giant IBM to produce microprocessors on the latter's 90-nanometre semiconductor lines, which will further cut the power consumption of VIA's CPUs, known for low power consumption.

Jeng said the focus of the processor business will be on industrial users, like securities and education, which run simple applications, but have high requirements on price and power consumption.

Last year, eight notebook computers uses VIA's Antaur processors and the company sold about 40,000 chips on the Chinese mainland, although its market share was only about 2.5 per cent.

The electronics company is also considering selling its latest game device, ApeXtreme, to the Chinese mainland market.

VIA released ApeXtreme with US consumer electronics company Apex in January.

The game device will use VIA's C3 microprocessors, chipsets, graphics and audio cards.

Jeng said his company is considering the possibility of releasing the products on the Chinese mainland.

Source: China Daily

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