Chipset maker Via Technologies Inc. announced today that Intel Corp. has granted the company a restricted license to use Intel's "P6 bus," a technology that Intel has closely guarded.
Under the agreement, Via may build and sell core logic chipsets for Intel's Pentium II microprocessors using Intel's "Slot 1" architecture. Via will sell certain versions of its Apollo Pro chipset family designed to use the P6 bus, paying Intel a royalty for each one. In addition, Intel has also licensed certain undisclosed patents from Via.
However, Via is not generally licensed to use the Slot 1 technology. Instead, Intel's license is restricted to specific Via products, said Dean Hays, director of marketing for Via Technologies Inc., Via's U.S. operations based in Fremont, Calif. Via's worldwide headquarters are in Taipei, Taiwan.
Hays said his understanding of the deal was that all products on Via's current product roadmap fall under the license, including the next-generation Apollo Pro 133, an unannounced chipset that will include a 133 MHz system bus. Although Intel can theoretically apply or deny the license to whatever future products Via designs, Hays said he didn't anticipate Intel would pose any opposition to future designs.
Until now, Via has concentrated upon designing and selling "Socket 7"-class chipsets, the infrastructure of choice for many of Intel's top microprocessor competitors, such as Advanced Micro Devices. The Slot 1 architecture and the associated P6 bus are required to build systems based upon Intel's Pentium II processors; Intel has previously drawn fire from industry observers for not publicly licensing the technology.
"The license definitely will help to increase our shipment volume," said Frank Jeng, marketing section manager of Via, a Taiwanese chipset maker whose U.S. operations are based in Fremont, Calif. "It will also help Intel to move the microprocessor market to Pentium II."
According to Taiwanese sources, Taiwan's core logic chipset makers, Acer Laboratories Inc. (ALI), Taipei and Silicon Integrated System Corp. (SiS), Hsinchu, also have been negotiating with Intel for the Slot 1 license. An SiS spokesman said that the company expected to be granted the license in the near future.
In May, both Via and SiS announced core-logic products based upon the P6 bus, following a similar announcement by ALI in March. However, all three companies had proposed using foundries with an existing cross-licensing agreement with Intel as a means of avoiding any legal quarrels. Such foundries include IBM Microelectronics Inc. and National Semiconductor Corp.
Although Via still heartily endorses the Socket 7 platform, the decision to build Slot 1-based chipsets "was designed to reassure customers -- big customers -- that felt uncomfortable buying products that were manufactured at licensed foundries," Hays said. "What it does is give Intel more competition in the chipset market." Even with the royalty payments, Via should still be able to sell the chipsets at a competitive price, he said.
For its part, Intel has publicly maintained that it would license its technology in return for "fair value". Shortly after government antitrust investigators reportedly began investigating whether Intel's Slot 1 interface inhibited competition, Intel representatives indicated that the chipmaker had already granted a P6 license to an undisclosed number of third-party companies.
A spokesman for Intel, Santa Clara, Calif. confirmed that Via has been granted a Slot 1 license on the Apollo Pro, adding that it applies to certain future products as well. "Our view is that (intellectual property) is an asset, and we try to strike some sort of balance to our satisfaction," he said.
Analysts said it was unclear whether Via will enjoy any special advantage from a formal license. To date, chipset and microprocessor makers alike have been able to manufacture Intel-compatible products at the licensed foundries, according to Dean McCarron, principal at Mercury Research Inc., Scottsdale, Ariz.
In addition, PC OEMs that design and build their own chipsets, such as Compaq Computer Corp., can employ a legal defense known as "implied use", McCarron said. Essentially, a purchaser that buys a Slot 1-compatible chipset from Intel Corp. has the right to use the corresponding chipset. "It's like buying gasoline -- it's of no use without the appropriate (gasoline-consuming) engine," he said.