HTC to move forward with S3 Graphics acquisition

Taiwanese smartphone maker HTC says it plans to go ahead with its planned purchase of computer graphics company S3 Graphics.

HTC had announced last July that it planned to buy the California-based company for $300 million. S3 was an attractive takeover target for HTC, as its 270 patents had stood up well in disputes against Apple. But HTC got cold feet over its acquisition of S3 last fall, when the U.S. International Trade Commission ruled in favor of Apple in a patent dispute between S3 and Apple.

The company said in November that it was reconsidering its options. Now it looks like the acquisition is back on, and HTC plans to go through with the original plan.

HTC's general counsel, Grace Lei, said during the company's annual shareholder meeting today that the S3 portfolio is "valid and strong," following the "cautious assessment," according to the blog Electronista.

In addition to the patents, HTC is also supposedly interested in S3 for the graphics processing-technology the company has developed. This technology could help HTC compete more aggressively with Apple, which is able to customize its own processors. S3's technology is mostly made for PCs, but some experts believe that it could be adapted to mobile devices.

Still, the patents are an important reason HTC could use S3. Apple and HTC have been engaged in a series of patent battles over the past few years. Several cases are still pending. Just last week, Apple filed its third complaint with the ITC against HTC in the past three years. The company claims that HTC is still in violation of the same patents that led to a recent import ban of the HTC One X and Evo 4G LTE.

HTC maintains that it has already taken steps to work around Apple's patents. The ITC agreed with the company and lifted its ban. But Apple is not happy with the decision, as it has filed its complaint again.

Earlier this week, the ITC also granted an Apple motion to dismiss five patents HTC received from Google last year.