Via expanding its scope: Taiwan-based chipset designer eyeing market for reference designs - Via Technologies

Electronic News, May 20, 2002 by Tom Murphy

Via Technologies Inc. is feeling a little bit hemmed in by the chipset business, which is why the Taipei, Taiwan-based company is thinking about entering the reference design market for small and wireless PCs, even if it means taking on some of its customers.

Via has made a few key splashes before. The company is known for offering core logic PC chipsets that provide capabilities people want but that Intel Corp. or other chipset manufacturers don't offer. But with Intel taking a more neutral approach toward memory allegiances, coupled with the fact that rapid growth opportunities are apparently becoming less numerous, Via is putting together system reference designs to diversify its business.

As the company likes to point out, Via was the first to market with chipsets that allow Intel PC processors to use DDR and PC-133 DRAM before Intel offered the same functionality. Via also provided key performance innovations for Advanced Micro Devices Inc. (AMD) platforms. As a result, Via's chipsets experienced huge spikes in sales when they first hit the market, something that helped the fabless company achieve a 35 percent market share among PC chipset vendors, according to Richard Brown, marketing director at Via.

But in creating chipsets that link up with Intel's front-side bus technology for its Pentium III and Pentium 4, Via never made the pilgrimage to Santa Clara, Calif., to pay official homage to Intel. And without an amicable relationship, Via now finds itself staring down the barrels of Intel's considerable legal resources. In the meantime, Intel has sufficiently persuaded enough PC motherboard manufacturers to not use Via chipsets, according to Kevin Krewell, an analyst with Micro Design Resources (MDR) in San Jose. (MDR is owned by Reed Business Information, the parent company of Electronic News.)

"The chipset business is not going to be a growth strategy for Via going forward," Krewell said.

Within the last six months Intel has also released the 845 and 845G chipsets, two products that allow the P4 to use DDR DRAM memory, thereby taking away a significant advantage Via was exploiting. And now that Intel has announced that it will support both DDR and RDRAM memories with its chipsets, the opportunities for Via seem fewer, according to Krewell. And while Via also owns a large portion of the AMD chipset business, AMD's next-generation processor, Hammer, will come with an integrated memory controller, preventing Via from exploiting that niche as well.

In response, Via has announced its Tablet PC reference design and a small form factor PC motherboard known as EPIA. The Tablet PC is Via's attempt to try and nail down a contract with Microsoft as a reference design provider for a wireless, PC-type device that can be carried around the home or office and uses a touch screen for input.

The EPIA design is a fanless solution for a quieter PC, according to Via's Brown. Its small size makes it ideal as a second home PC, Brown said, or it can be configured for set-top box types to applications or industrial embedded PCs. The device will also permit a $100 price-point, according to Brown.

"This should establish Via in a new segment," Brown said.

Of course, every new business venture also has its challenges. National Semiconductor went into the reference design business in a big way and it has yet to show that it can make any money at it. And Krewell pointed out that Via may take on its own customers as competitors in the design reference segment, a move that could backfire in Via's chipset business. Still, the most daunting task for Via is to overcome the challenging business environment while launching a new business venture, Krewell said.