Taiwan-based chipset maker Via Technologies Inc. signed a letter of intent to purchase National Semiconductor Corp.'s Cyrix standalone microprocessor business unit today for an undisclosed amount.
While Via's purchase should ensure a stable future for Cyrix's microprocessor portfolio, the deal leaves several questions unanswered concerning Via's status as a chipset supplier. Further details on the timing and structure of the transaction will be announced during July, executives said.
Cyrix will most likely become a standalone subsidiary of Via, with the Cyrix design team retaining its current headquarters in Richardson, Tex., said Stan Swearingen, vice-president of standalone microprocessor marketing at Cyrix. Swearingen will become general manager of the new subsidiary, which plans an IPO either in Taiwan or the U.S. to raise capital and as an incentive to retain the Cyrix engineers. Cyrix's product roadmap and timetable will remain unchanged, he said.
However, the deal does not involve either National's production fab in South Portland, Maine, or the x86 patent license National signed with Intel in 1976. A spokesman for Santa Clara, Calif.-based National said a sale of a majority stake in the Portland fab is being negotiated separately, and National has no firm timetable for its completion. Via, a fabless company, manufactures its chipsets in foundries in Taiwan.
The acquisition was originally seen as a defensive move for Via, which is embroiled in a patent suit with chipset and, now processor, rival Intel Corp. Observers suspected that Via was interested in acquiring or obtaining the right to use National's existing patent cross-license with Intel as a means to legally manufacture chipsets that were not covered under its own license.
As a fabless supplier, Via must either obtain the requisite P6 and x86 licenses itself, or manufacture the products at a foundry that has its own license. As part of its suit, Intel revoked Via's license to use its P6 bus technology about two weeks ago. It was suspected, however, that the existing, currently-shipping Cyrix processor cores are indeed covered under the license.
According to Swearingen, National does not have the right to sell its x86 license, but there are other, undisclosed alternatives, he said. "We'll be doing due diligence in the next month," he said. "We believe we have a bulletproof method to handle the [intellectual property]."
A statement released today by Via seemed to confirm Swearingen's statements. "VIA will continue its role as a leading supplier of P6-level chipsets, including as yet unannounced PC133 solutions, under a third-party manufacturing agreement that will be announced in the immediate future," the statement said. "Motherboard and OEM customers have been kept informed of issues involved and already have been made aware of the nature of the situation." The statement added that the company has taken the "necessary legal action" to protect its rights.
A spokesman for Intel declined to comment on Via's remarks. However, he said that by purchasing Cyrix, Via does not intrinsically gain access to National's cross-license. "If the question is does the license attach itself to Cyrix when Cyrix gets sold, then the rule of thumb is no," he said. He declined to comment on the specifics of the licensing agreement.
Swearingen said seven suitors originally sought Cyrix's technology, ranging from large, multinational OEMs to firms that wanted Cyrix's technology for high-speed digital signal processing. National confirmed the discussions with Via earlier this week, as previously reported. In the end, Via's role as part of the Formosa Group, a large Asian conglomerate that he called the "General Electric of Taiwan," made the difference. 'Everything's shifting to Taiwan," he said.
As a former marketing executive for National's integrated MediaGX processor, Swearingen said he has considered whether Via's new subsidiary will design similar integrated products that combine a chipset and microprocessor core. Discussions in this area have not been finalized, but, the initial customer response has been negative, he said. Customers are more concerned with the total price of the system and its form factor then whether it's one chip or ten, he said.
"A lot of the top-tier CTO's believe in two-chip partitioning," he said. "But we have the wherewithal to do one hellacious single-chip solution."
Right now, Swearingen said Cyrix plans to sample its Socket-370 Gobi processor in four weeks, with production in time for Christmas. The Mojave core will ship in Christmas 2000, he added.