Acer Labs lay groundwork to go public

Electronic News, Dec 2, 1996 by Jim DeTar

Las Vegas--The Acer Group, based in Taiwan, has plans to turn as many of 21 of its divisions into independent companies by early in the 21st Century, Electronic Newshas learned. As part of this massive restructuring by the Acer Group, which will have 1996 revenues of around $5.4 billion, Acer Laboratories Inc. (ALi), Acer Group's San Jose, Calif.-based semiconductor unit, will likely go public within the next two years

Nancy Hartsoch, ALi VP of marketing and sales, commented in an interview that ALi appears headed toward greater independence from its parent, Acer Group.

"We plan to do an IPO within the next few years. Currently Acer (Computer), which has annual revenues of $5.4 billion, owns about 70 percent of ALi, which had revenues of about $140 million in 1996, but Acer is reducing its stock holding in the company," Ms. Hartsoch said. She added that the move is part of a larger strategy being unfolded by Acer Computer and includes a planned IPO by ALi's U.S. parent, Acer America.

"Acer has said its goal is '21 in 21,' that is, it wants to make independent companies of 21 of its units by the 21st century." ALi would almost certainly meet the market requirements for an IPO. The unit has been growing about 30 percent a year but could grow as much as 40 or 50 percent next year, according to industry observers.

Continuing that strong growth pattern, ALi introduced two chipsets recently at fall Comdex: the enhanced Super I/O and the Ultra Super I/O controllers.

The company introduced the M513x Super I/O controller with an integrated keyboard controller (KBC). The M513x supports Intel's PIIX4 Triton TX chipset or other core logic chipsets that have an integrated real-time clock (RTC), and the keyboard controller in the M513x Super I/O is available with either AMI keyboard controller code (M5135) or Phoenix keyboard controller code (M5133).

A second chip, the M514x is an Ultra I/O controller with automatic power management. It targets desktop and notebook PC designs and is similar in feature set to the company's previously introduced M512x controller. However, the M514x adds support for advanced configuration power interface (ACPI). When used with chipsets that do not support the emerging ACPI standard, the M514x I/O chip can provide the ACPI specifications without changing the core logic used in the system.

Both parts incorporate two universal asynchronous receiver/transmitters (UARTs) and an internal data separator with send/receive 16-byte FIFOs on-board. They support such basic functions as standard, enhanced and high speed modes, as well as SPP, PS/2 EPP and ECP parallel ports. Also on-board is a programmable baud-rate generator. The M513x in 100-pin PQFP package is priced at $4 and the M514x in 160-pin PQFP is $5.50 in quantities of 10,000 units. They are expected to sample this month and be available in production quantities in January.

Ms. Hartsoch said that Intel usually gets the first round of chipset wins after it introduces a new MPU such as the Pentium Pro, but that processor has been around long enough now that ALi is now ready to compete with Intel for Pentium Pro sockets. "The first two or three turns of the Pentium Pro we will not beat Intel--they will own that market." Ms. Hartsoch said, adding that she believes ALi's chipsets have an advantage in that "They will run with Cyrix and AMD microprocessors," as well as Intel MPUs.

Ms. Hartsoch also revealed that ALi is planning to enter new markets in the months ahead including: "Providing an alternate CPU to Intel's processor family. Also the notebook market--we've never done a lot there before."

Currently 60 percent of ALi's business is core logic and 40 percent is peripherals. Despite its plans to compete with Intel processors at some level, ALi is gradually making a shift toward the peripherals market as evidenced by the fact that a year ago the ratio was 75 percent core logic and 25 percent peripherals.

ALi has several projects on the drawing board including the next versions of the company's Alladin Pentium chipset family. ALi is at work on Alladin 4, which sources said will include two new chips: the M1531 and M1533/43 (desktop and notebook versions).