Acer Labs gets Intel license

In a move that will likely lead to a wider variety of cheaper computer components, Acer becomes the latest semiconductor maker licensed to make chipsets for Intel processors.

Michael Kanellos Staff Writer, CNET News.com
Michael Kanellos is editor at large at CNET News.com, where he covers hardware, research and development, start-ups and the tech industry overseas.
Michael Kanellos
2 min read
Acer Laboratories (ALI) became the latest semiconductor maker to get a license from Intel to make chipsets for the Pentium architecture, a move that will likely lead to a wider variety of cheaper components.

ALI, the silicon subsidiary of the Acer conglomerate, now will be able to manufacture chipsets that will work in conjunction with the Pentium III, Pentium II, and Celeron processors, according to Chuck Mulloy, an Intel spokesman. Chipsets, which in bulk cost around $25 to $40, essentially act as a conduit between the processor, the main memory and the rest of the components of a computer.

With the deal, ALI becomes the fifth chipset vendor in less than a year to get the rights to use intellectual property that what was once doled out very sparingly by Intel. Intel commanded a de facto monopoly on the Pentium II and Celeron chipset market for 1997 and most of 1998 because no other company had a license to make the products.

Ironically, Intel recently revoked the license of Via Technologies, the first licensee, and filed a patent-infringement suit alleging that Via went beyond the bounds of the agreement.

Initially, observers believed that Intel was licensing its intellectual property to appease the Federal Trade Commission. Now that that suit is settled, licensing appears to be serving another end: by giving licenses to these companies, they will become less dependent on AMD. All of these companies make chipsets for AMD and, during the time Intel did not license its intellectual property, AMD was the main game in town.

Having additional licensees also means a wider variety of chips at lower prices.

Details of the license were not discussed, but Mulloy added that ALI will pay Intel a license fee. Intel will also get access to ALI intellectual property.