Via to sell S3 Graphics to HTC

In the PC market these days, the integration of microprocessors and graphics is the name of the game—it drove AMD to purchase ATI back in 2006, and it’s pushing Intel to offer ever-faster integrated GPUs inside its CPUs. What about Via? Well, the small Taiwanese firm announced a rather surprising move earlier today: it’s selling its entire stake in S3 Graphics to handset maker HTC.

S3 Graphics, of course, can claim credit for serving up Via’s various integrated graphics processors over recent years. Via snatched up S3 back in 2001, but it sold part of its stake to private investment firm WTI Investment International in 2005 to “help fund the operations and R&D initiatives.” Now, HTC will purchase “all outstanding shares” of S3 Graphics, paying Via $147 million and WTI $153 million.

Interestingly, it looks like Via will get to keep using S3’s graphics technology after the buyout’s expected completion date (some time before the end of 2011), presumably through some sort of licensing agreement:

“The transaction would allow VIA to monetize a portion of its rich IP portfolio, yet retain its graphics capabilities to support the development and sale of its processors and chipsets,” said Tzu-mu Lin, Senior Vice President and Board Director of VIA. “We wish to thank WTI for its capital contribution to support S3 Graphics since 2005.”

That leaves us scratching our heads about the reasons for the move. I suppose Via might be in need of the cash—though, from talking with the company, I’ve gotten the impression that it’s doing reasonably well in developing markets like China. Selling off one of its key assets certainly seems like an odd way to stay afloat.

Looking at the people involved may provide some clues. As the press release points out, Cher Wang is Via’s Chairperson and a “significant shareholder” of WTI, which co-owns S3. Mrs. Wang also happens to be one of the co-founders of HTC… and Wikipedia tells us she’s married to Via founder and CEO Wen Chi Chen. Perhaps the move isn’t as drastic as it might seem to the uneducated eye, then.

We could also don our tinfoil hats and surmise that Via is merely setting the stage for another acquisition—one involving Nvidia. Yes, Nvidia has repeated time and again that its microprocessor strategy is focused on ARM, and it’s even announced an ARM-based processor for desktops and servers. That said, the rumor mill has been churning away for some time about the possibility of an Nvidia-Via merger, which would finally endow Nvidia with an x86 CPU license—and the ability to compete with AMD and Intel on their home turf.

Comments closed
    • HisDivineOrder
    • 8 years ago

    nVIAdia?

    Hm. I don’t think the x86 license will transfer, though. Isn’t it the case that if VIA is purchased that the x86 license is lost? I thought I remembered reading that a while back…

    I’m pretty sure this was done by Intel because they didn’t want x86 licensees popping out of the woodwork by purchasing the existing ones…

    My thought was that by selling part of VIA to HTC, they’re setting the stage to sell all of it over eventually. HTC is an OEM maker for other companies and needs lots of parts. VIA makes most of its money from component sales. Seems like a great fit to me, especially considering the family relations you described.

    Seems more likely HTC’ll just buy all of VIA in pieces versus nVidia doing an about-face to buy VIA and then fight Intel in court to get to use that x86 license. Plus, I’m not sure what VIA has (besides that license) that nVidia might want. Their CPU’s have been horrible, their chipsets ridiculously horrible, and their brand name recognition is next to nil at this point. I could have seen nVidia wanting the patent on that texture compression patent, but now that’s gone. nVidia is a fab design company for chips, SOC’s, and chipsets, not a component maker like VIA. Doesn’t seem like the best fit at present, especially with the loss of the S3 tech, for nVidia.

    Seems like a way for HTC to bring some of the components it’s purchasing in bulk in-house, though.

    • tejas84
    • 8 years ago

    “Perhaps the move isn’t as drastic as it might seem to the uneducated eye, then.

    We could also don our tinfoil hats and surmise that Via is merely setting the stage for another acquisition—one involving Nvidia. Yes, Nvidia has repeated time and again that its microprocessor strategy is focused on ARM, and it’s even announced an ARM-based processor for desktops and servers. That said, the rumor mill has been churning away for some time about the possibility of an Nvidia-Via merger, which would finally endow Nvidia with an x86 CPU license—and the ability to compete with AMD and Intel on their home turf.”

    HUH? VIA could not afford Nvidia if they tried. Even if his hliness Obama gave them a bailout they could not afford Nvidia.

    Good riddance to Via

      • kroker
      • 8 years ago

      No, I’m pretty sure he meant that Nvidia could buy them, not the other way around. But won’t VIA lose the x86 license once it’s acquired?

        • derFunkenstein
        • 8 years ago

        I was thinking the same thing.

        • mutarasector
        • 8 years ago

        Depends on just who would acquire them. If ownership remains domestically U.S. based, perhaps not.

        I don’t see a real advantage for Nvidia to do so considering they’ve pretty much gone all-in on ARM and doesn’t want to go toe to toe against AMD and Intel in an x86 market w/x86 after investing the effort of GPU development.

    • slaimus
    • 8 years ago

    This looks to be done for tax reasons more than anything else. HTC is raking in the profits, so saddle it down with S3 to reduce corporate income taxes. VIA without S3 R&D cost but able to use their IP will be back in the black, at a minimal tax burden.

    • grantmeaname
    • 8 years ago

    I thought x86 licenses were nontransferable and were invalidated if the company was bought out… that’s what I remember from the talk of nVidia buying AMD back in the day, at least.

      • raddude9
      • 8 years ago

      Maybe Nvidia is going to try some kind of reverse buy-out, where they let VIA buy out Nvidia but then install the Nvidia board as head of the new operation. I imagine some kind of corporate shenanigans like that would be possible as long as your lawyers are up to the task of the inevitable Intel lawsuit.

      Either way, I’d like to see it, a third serious CPU (and integrated GPU) competitor would be nice.

      • guardianl
      • 8 years ago

      Intel claimed this when National Semi sold it’s Cyrix x86 unit to Via pre-2000. If the agreement with Intel really did prevent this, Intel would have been able to stop Via, but they didn’t. You can draw your own conclusions…

      The issue has more to do with all the x86 developments since then. Via has x64 support in it’s current CPUs, but that might have been via a separate license from AMD, which could have any number of conditions attached.

      Nobody wants to buy an x86 license via Via because getting a product competitive with Intel/AMD would likely cost billions. And then, where to do you fab it?

      IBM made a big mistake dropping out of the x86 race, but I don’t think we’ll see anyone charge in now with billions to burn…

      The CPU company to watch for acquisition is ARM. Somebody will try to buy them, and there will be one hell of a bidding war between all the ARM instruction stake holders…

        • cegras
        • 8 years ago

        Since IBM bowed out of the x86 arena, what happened to their license? Just gathering dust?

          • Deanjo
          • 8 years ago

          Everything that IBM had a license for is no longer coveredas the patents that they included have expired.

      • Kurlon
      • 8 years ago

      Do you NEED an x86 license to produce a pure amd64 cpu?

        • wibeasley
        • 8 years ago

        There’s no such thing as a “pure amd64” pure, as I understand it, which is why that route to 64-bit was so much more successful than Itanium.

          • mtizzle
          • 8 years ago

          wibeasley is right, x64 is an extension of the base x86 architecture. So to build and x64 system you also need an x86 license.

    • dashbarron
    • 8 years ago

    Why does it seem like Nvidia is changing their business model in terms of the CPU constantly? From a casual viewer like myself, Nvidia is always re-focusing their CPU business.

      • maxxcool
      • 8 years ago

      it’s beacuse as i have noted before…. Jen-hsun is a flat out bag of nuts and squirrels… brilliant (sometimes) but just damn nutty….

        • Forge
        • 8 years ago

        Equal parts madness and genius seems to be the most successful setup in the GPU industry. 3Dfx had that, NV has that, and ATI has had small doses of it from time to time.

        Interestingly, the two with the most madness/genius (3Dfx/NV) have also been the most dominant. 3Dfx showed how not to do it, though. Pursued a vision that was too far ahead of the curve, failed to make it materialize, and collapsed. Nvidia has had several incidents of the type (FX 5800, Fermi, others), but seem to commit less, allowing them to survive.

      • Deanjo
      • 8 years ago

      [quote<]Why does it seem like Nvidia is changing their business model in terms of the CPU constantly?[/quote<] They haven't, it is just the typical rumor based on no facts at all. They keep seem to be forgetting that Via's license is non transferable.

        • mutarasector
        • 8 years ago

        Deanjo, I believe VIA’s license may be transferable if the sale goes to a domestic U.S. buyer.

          • Deanjo
          • 8 years ago

          No it isn’t, at least the license that extends capabilities past the pentium chip which via acquired through the sale of Cyrix –> National Semi –> Via and all of those patents have reached their expiry date. The additional license that was aquired for items like SSE support and beyond is non transferable.

    • can-a-tuna
    • 8 years ago

    So now that cheap android maker can put S3 Virge level of 3d in their handsets. How exiting.

      • Corrado
      • 8 years ago

      I think S3 has some kind of patent licensing agreement with the PowerVR guys, buying them leverage since a lot of the ARM cpu’s use PowerVR graphics cores.

        • poulpy
        • 8 years ago

        It still sits a bit strangely regarding the technology HTC uses as they are solely Qualcomm’s Snapdragons customers, which carry their own (formerly AMD’s) GPU technology: the Adreno line.

        [url<]http://en.wikipedia.org/wiki/Snapdragon_%28processor%29[/url<]

          • Corrado
          • 8 years ago

          Maybe they’re unhappy with Qualcomm and want to see if they can make their own? I dunno honestly.

            • poulpy
            • 8 years ago

            It’s possible HTC wants to integrate/control more of their own technology inside of their devices.
            Wikipedia has them as number #3 phone manufacturer in 2011 after Apple and Samsung (http://goo.gl/hrsqH), and given that #1 and #2 are in that exact business of making their own ARM SOCs it wouldn’t be that surprising.
            S3 must come with quite a rich portfolio too I would think.

            • destroy.all.monsters
            • 8 years ago

            I suspect it might have something to do with the handset patent wars.

            I could be way off though.

      • lex-ington
      • 8 years ago

      Cheap in comparison to what?

      Don’t call something cheap because they use android. I wouldn’t pay Microsoft or apple royalties if Google wants to make their OS available to me for free – its called business sense.

      So what are we comparing this cheapness to? What exactly is cheap? What device of theirs are you ultimately referring to?

        • JMccovery
        • 8 years ago

        I feel that HTC phones are a good bit better than what Motorola and Samsung put out…

      • ludi
      • 8 years ago

      [quote<]How exiting.[/quote<] I can't tell if this wordplay is intentional, or a product of the public school system, but it works.

    • Corrado
    • 8 years ago

    “Notably, WTI is a private investment company, in which VIA Technologies chairman Cher Wang is a significant shareholder. Update: Wang also co-founded HTC, by the way.”

    Its Wang moving his money around to protect HTC from patent trolls, Microsoft and Apple.

      • dpaus
      • 8 years ago

      Yup, that explains it…

      • Namarrgon
      • 8 years ago

      [b<]Her[/b<] money. She's a pretty notable Taiwanese entrepeneur. She's also chairperson of HTC.

    • blorbic5
    • 8 years ago

    What about the racoons?

      • dashbarron
      • 8 years ago

      Ah I see what you did there!

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