Graphics chip maker S3 Inc. and Via Technologies are joining forces to take on Intel Corp. in the fast-growing market for inexpensive chips that combine some key features into a single product.
The two companies are forming a joint venture, currently named S3-Via Inc., and are already showing PC manufacturers prototypes of the product that combines S3’s graphics technology with a standard chip set–the semiconductors that act as a bridge between a computer’s processor and the rest of the system. Intel pioneered that market with its recently introduced 810 chip set.
Combining the ability to process standard graphics data with the chip set lowers the overall cost of the PC and takes up less space–important considerations for the low-priced PCs and laptop computers that S3-Via will target.
The agreement was only finalized last week, although the two companies had announced plans to jointly develop products in March.
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Paul Crossley, an S3 spokesman, said the companies have already created a product that combines S3’s Savage 4 graphics chip design with Via’s most advanced chip set. Samples are already being shown to computer companies, and two of the largest manufacturers are already ordering products, Crossley said.
He declined to identify the customers.
Analysts familiar with the agreement said they expect the performance of the S3-Via product to be noticeably superior to Intel’s offering in that market.
“Intel let their (graphics) technology slip from leading edge to trailing edge,” said Giga Information Systems analyst Rob Enderle. “Intel’s product isn’t bad, but the S3-Via product will be much better, and will cost just nominally more.”