Chipset maker Via Technologies Inc. is in talks to acquire National Semiconductor Corp.'s Cyrix microprocessor unit, National officials confirmed today.
The talks have not been completed, and a spokesman for Santa Clara, Calif.-based National said it is considering Via as but one of an unnamed number of prospects at this point. But officials at Via's headquarters in Taipei, Taiwan, said they anticipate an announcement shortly; observers expect it by Wednesday.
"Via's one of the Cyrix prospects at this point," said a spokesman for National. "We're still in discussions with them and some others."
National's chairman, chief executive, and president, Brian Halla, previously set a deadline of June 30 to complete the sale of Cyrix's standalone business unit, and pledged to shut down the operation if it missed the cutoff date. A spokesman for National today confirmed the deadline is still "hard and fast."
According to Taiwan-based sources, Via intends to purchase the Cyrix operation and then pay National either royalties or cash for the use of the X86 processor cross-license National separately negotiated with Intel Corp. One Taiwanese source said he anticipates co-branded National/Via chipsets to be produced in National's fabs beginning as early as July.
The deal, if finalized, could be seen as a defensive move by Via in its ongoing patent fight with Intel. The Santa Clara, Calif., processor market leader filed a lawsuit in a San Jose federal court last week, charging Via with breach of contract, unfair competition, and false advertising.
Among other charges, Intel's suit claims Via is manufacturing chipsets not covered under a P6 bus license agreement the two signed in November 1998, a license Intel has since withdrawn. Intel is also arguing that Via's current practice of using National's fabs to manufacture its chipsets is not permissible under National's own cross-licensing agreement with Intel.
By barring Via from using its technology, Intel in effect is preventing the company from selling its newly introduced ApolloPro+ 133 core-logic chipset. The device, which was launched earlier this month, has generated significant interest among Taiwan's motherboard makers, which are hoping to include the device's 133-MHz front side bus as a feature in upcoming boards.
Ted Lee, director of sales at Via, said the company expects to strike a deal to eliminate the licensing constraint, although he stopped short of naming National. "We are working with a third party to cover the PC-133 front side bus patent," he said. "The announcement will be made soon." Several sources also said Wen Chi Chen, Via's chief executive, is on an extended visit to Silicon Valley possibly to conduct negotiations.
Observers have said that National wanted $350 million for the Cyrix operation; Via reportedly was offering $175 million. It was not known whether those figures include National's fab in South Portland, Maine, of which National is selling a majority interest. Throughout the past months, Via executives have said they were exploring other avenues for integrating components with their chipsets, including microprocessor cores.
The suit has also forced Via's graphics partner, Trident Microsystems Inc., Mountain View, Calif., to explore other options. If Via can not obtain a P6 bus license from Intel or through National, then Trident will be unable to market its CyberBlade i1, an integrated chipset that pairs Trident's graphics core and a P6 bus interface.
Sources close to Trident said the company was in negotiations to license its technology to Taiwan's Acer Laboratories Inc., a chipset maker which acquired its own P6 license from Intel last week. A Trident spokesman declined to comment.