Via gears up to battle Intel

TAIPEI, Taiwan--Chipmaker Via Technologies introduced a new round of microprocessors for low-budget PCs today, as the company's CEO predicted that Via has a chance to pass Intel to become the leader in chipsets.

The company introduced a new version of its Cyrix III processors at the Computex trade show here this morning. Running at speeds between 533 MHz and 667 MHz, the new processors are priced between $75 and $160 and will be targeted at budget PCs and notebooks.

The chipmaker, however, represents a more serious threat to Intel in the market for PC chipsets, a necessary, if unglamorous, piece of silicon that serves as a conduit between the processor and the rest of a PC.

Via, based here, has steadily captured market share from Intel in the past year because of an expanded product lineup and a series of snafus at the Santa Clara, Calif., chip giant. Just yesterday, Intel said it had delayed by several months the launch of its integrated processor, code-named Timna, because it needs to develop a new method to connect the integrated processor to standard memory.

Now, the company is approaching the point where it could pass Intel, said Via CEO Wen Chi Chen.

"There is a pretty good opportunity that we will be No. 1 in the chipset business" by the end of the year, he said in an interview with News.com. "People realize that Via has better performance and a cost structure."

Via, which has seen its stock surge in recent months, has emerged in the past 18 months as one of the more visible PC semiconductor companies, establishing relationships with most of the major PC makers. Its purchase of Cyrix and the processor division of IDT last year put it in the processor market. Earlier this year, it bought a controlling interest in S3's graphics chips, putting it in the market for high-end graphics chips.

Chipsets have been the primary engine for growth. The company has enjoyed a spillover effect from the growth of Advanced Micro Devices because it is a primary supplier of AMD-compatible chipsets.

Intel's concentration on a new type of memory, called Rambus, has also helped Via. Rather than develop Rambus products, Via concentrated on chipsets that connected to standard memory. Because of delays to Intel's chipsets, as well as the high price of Rambus memory, major computer makers have signed up with Via.

"The primary reason for growth has been that Via has established the product," Chen said. "But Rambus provided a special reason" for computer makers to shift, he added. In March, the company shipped four million units. While this leaves Intel clearly in the lead, market share continues to grow.

While Via is less of a presence in the processor market, the new chips will help it close the gap between Intel and AMD. To date, Via's chips have lagged in speed behind the budget processor from the other two. That gap is now much narrower.

Chip competition

"We are leading in the megahertz game," Chen said. Over the next two weeks, however, both AMD and Intel will formally launch 700-MHz budget processors.

The new Cyrix III chips differ in a number of ways from the earlier Cyrix III. For one thing, the chips derive from chip designs Via acquired from IDT, not Cyrix. Via decided to keep the same brand name to keep the brand consistent, he said.

Currently, Via sells most of its chips in non-U.S. markets.

Intel will release its 815 chipset on June 19. The chipset will combine a faster 133-MHz system bus with regular memory. Several motherboard makers are displaying the chipset at the show. The chipset is expected to be fairly popular, according to analysts.

In an Intel hospitality suite here, the company is displaying over 60 motherboards from different manufacturers showing the chipset. By contrast, Intel is only displaying around 20 motherboards containing its 820 chipset for Rambus, including one made by Intel itself.

Later in the year, Via and Intel will then heighten their growing competition with the release of Double Data Rate DRAM (DDR DRAM), a version of current memory that is twice as fast. Via is a proponent of DDR and will come out with a chipset in the fourth quarter, said Chen. Computer makers will likely release PCs at the same time.

Although it will use DDR in servers, Intel has stated it will stick with Rambus memory for performance desktops when it releases Willamette, its next generation processor.